I. INTRODUCTION

Decision (D.)11-05-026 involved Application (A.) 08-09-024, filed by San Pablo Bay Pipeline Company LLC ("SPBPC") for approval of tariffs for the San Joaquin Valley Crude Oil Pipeline ("Pipeline"). The proceeding also involved several complaint cases: (Cases (C.) 08-03-021, C.09-02-007, and C.09-03-027. In D.11-05-026, we (1) denied SPBPC's request to charge market-based rates for the transportation of heavy crude oil from the Pipeline; (2) set rates for the transportation of crude oil between the San Joaquin Valley and the San Francisco Bay Area at $1.34 per barrel; (3) resolved complaints filed by Independent Shippers¹ against SPBPC and Shell Trading US Company ("STUSCO")² and ordered refunds for past overcharges from April 1, 2005 to the effective date of D.11-05-026; (4) approved the transfer of physical assets from the Pipeline's former owner to SPBPC; (5) denied SPBPC's request to exclude certain tanks and truck racks from the assets transferred to it; and (6) adopted a tariff to govern the provision of heated oil transportation service by SPBPC.

SPBPC and STUSCO timely filed separate applications for rehearing of D.11-05-026. Each of the Independent Shippers (Chevron, Tesoro and Valero) filed timely responses that opposed the applications for rehearing.

In its rehearing application of D.11-05-026, SPBPC alleged the following errors: (1) The determination that refunds are due from April 2005 is not supported by the record, exceeds the Commission's authority, and constitutes an abuse of discretion; (2) the refund calculation and the forward-going rate are unlawful; (3) the Commission adopted unlawful tariff terms and conditions; and (4) the determination of public utility status involving the private storage tanks and truck racks is unlawful.

In its rehearing application of D.11-05-026, STUSCO argued that (1) the determination to include private storage tanks and truck racks in SPBPC's jurisdictional property constitutes an unlawful taking under federal and state constitutions; (2) the Decision adopted unduly discriminatory tariff terms and conditions without providing necessary analysis or findings of fact to support the tariff; and (3) the Commission exceeded its legal authority by ordering refunds, and by imposing refund liability on STUSCO.

In D.12-02-038, the Commission granted limited rehearing of D.11-05-026, on the issue of the calculation of the refunds, modified the decision, and denied rehearing of the decision, as modified.³ We found no merit in the Shell Parties' allegations involving the Commission's jurisdiction to regulate SPBPC as a public utility, the status of the storage tanks and truck racks as utility property, the applicable statute of limitations for the refunds, the application of the rule against retroactive ratemaking, STUSCO's joint and several liability for the refunds, and other related legal challenges.⁴

On March 19, 2012, the Independent Shippers jointly filed an application for rehearing of D.12-02-038 on the issue of the refund calculation, and request that the Commission immediately lift the stay on payment of refunds. (Joint Application of the Independent Shippers for rehearing of Decision 12-02-038 granting limited rehearing on the calculation of refunds, pp. 2 and 19. ("Independent Shippers Rehrg. App.") They allege the following errors: (1) that the decision contains no supporting evidence from the record for its refund calculation method, contrary to Public Utilities Code Section 1757(a),⁵ 2) that the decision's refund rate calculation exceeds just and reasonable rates contrary to section 451; and (3) that the decision will reward Shell Pipeline for its abuses of market power contrary to Commission precedent and state and federal antitrust laws. SPBPC and STUSCO both filed responses opposing the Independent Shippers rehearing application.

In our review of the application for rehearing of D.12-02-038, we have come to the conclusion that good cause exists for the granting of a limited rehearing on the issues involving the refund calculations and the correct methodology for determining the refund amount. We will modify D.12-02-038 to clarify the limited rehearing of D.11-05-026 that was granted by D.12-02-038. Also, in our consideration of Independent Shippers' rehearing application, we are of the belief that all matters related to the refund issues should be considered together. One such matter is our determination on the statute of limitations issues in D.12-02-038 and D.11-05-026. Accordingly, we vacate the statute of limitations determinations in both of these decisions. These issues will be reconsidered as part of the limited rehearing of D.12-02-038 we are granting today. Further, we will consolidate this limited rehearing with the limited rehearing of D.11-05-026 that we granted in D.12-02-038.

¹ "Independent Shippers" is the collective designation of Chevron Products Company ("Chevron"), Tesoro Refining and Marketing Company ("Tesoro") and Valero Marketing and Supply Company ("Valero") all of whom ship undiluted heavy crude oil on the Pipeline to their respective Bay Area refineries. (D.11-05-026, p. 3, fn. 1.)

² STUSCO is an affiliate of SPBPC, and both entities make up the "Shell Parties" that also include Shell Oil Products US ("SOPUS") and their parent corporation, Royal Dutch Shell ("Shell"). SPBPC was created to serve as the public utility; it is the successor of Equilon Enterprises LLC dba Shell Oil Products U.S. ("Equilon"), and Shell Trading (US) Company. (See Application, p. 1.)

³ In D.11-10-019, the Commission granted a motion for partial stay of D.11-05-026, pending the Commission's disposition of the application for rehearing of D.11-05-026. (Order Granting Motion for Partial Stay of Decision (D.) 11-05-026 [D.11-10-019] (2011) ___ Cal.P.U.C.3d __, p. 3 (slip op.).). This partial stay involves the payment of the refunds ordered in D.11-05-026. In D.12-02-038, pp. 37-38, the Commission did not lift this partial stay, because limited rehearing was granted on the proper methodology to be used to determine the refunds.

⁴ On March 16, 2012, SPBPC and STUSCO jointly filed a petition for writ of review, ("writ petition") challenging the lawfulness of D.11-05-026 and D.12-02-038. (See San Pablo Bay Pipeline Company, et al v. Public Utilities Commission of the State of California, California Court of Appeal, Fifth Appellate District, Case No. F064501.) In their writ petition, they allege, along with two other allegations of error that are not within the scope of this rehearing application, that the Commission applied the wrong statute of limitations, and then misapplied that statute to the Independent Shippers' refund claims.

⁵ All subsequent section references are to the Public Utilities Code.