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"). In that decision, the Commission resolved, among other things, three complaints filed by Independent Shippers1 against SPBPC and Shell Trading US Company ("STUSCO")2 and ordered refunds for past overcharges for transportation of oil over the Pipeline from April 1, 2005 to the effective date of
D.11-05-026.
SPBPC and STUSCO timely filed separate applications for rehearing of D.11-05-026. In that decision, in determining a just and reasonable rate for the refund period, and in order to even the playing field for all shippers, we used the STUSCO market based rate as a proxy to calculate refunds. (D.11-05-026, p. 18.) This was the rate SPBPC's witness swore the pipeline "negotiated" with its affiliate STUSCO for transportation charges of San Joaquin Valley Heavy Blend to the Shell Martinez Refinery ("SMR Rate")) during the relevant period. (D.11-05-026, p. 18 [COL 6-9;] RT. 650, Vol.4, pp. 6-651:24 (LaBorne/SPBPC).) In its rehearing application, SPBPC alleged, inter alia, that the refund calculation was unlawful, because our use of the SMR Rate as a proxy for a just and reasonable rate for the refund period should be based on actual monthly variations in the transportation charges for deliveries of oil on the Pipeline, and not, as the decision determined, on two, single monthly invoices (one from April 2005 and one from January 2006). (SPBPC's Application for Rehearing of
D.11-05-026, pp. 24-28.)
In D.12-02-038, we granted limited rehearing of D.11-05-026 on the issue of the calculation of the refunds because we concluded that our prior decision appeared arbitrary in that it provided no reasonable explanation for fixing the rates for the entire refund period on two single monthly invoices. (D.12-02-038, p. 24 (slip op.).)3 Pending the outcome of the limited rehearing, we did not modify the decision's determination that the STUSCO proxy rate was the correct measure, and limited the rehearing to determine the calculation of the refunds based on the monthly rate variations during the refund period. (Id.)
On March 19, 2012, the Independent Shippers jointly filed an application for rehearing of D.12-02-038. This rehearing application focused on the issue of the refund calculation. (Independent Shippers' Application for Rehearing of D.12-02-038, pp. 2 & 19.) They alleged the following errors: (1) the decision contained no supporting evidence from the record for its refund calculation method, contrary to Public Utilities Code Section 1757(a),4 2) the decision's refund rate calculation exceeds just and reasonable rates contrary to section 451; and (3) 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 D.12-04-050, we granted, inter alia, limited rehearing on all issues involving the refund calculations and the correct methodology for determining the refund amount. (D.12-04-050, pp. 4-5 (slip op.).) We modified D.12-02-038 to clarify the limited rehearing of D.11-05-026 that was granted by D.12-02-038, and consolidated the two limited rehearings.
Based on our review of the Independent Shippers' rehearing application of D.12-02-038, we concluded that further consideration was necessary and warranted on all the issues surrounding the refund methodology and calculation. We explained that D.12-02-038 was unclear as to the scope of the limited rehearing granted of D.11-05-026 on these issues, and that the language in D.12-02-038 may have been too restrictive. Thus, we granted limited rehearing so that further proceedings could be held on the correct methodology and calculations of the refund, based on the record. We further noted that our review of the evidentiary record indicated that there may not be a complete record on the correct refund calculation methodology, and thus, we granted limited rehearing of D.12-02-038 to give the parties notice and an opportunity to be heard on our consideration of the correct methodology and calculation.5 Moreover, we stated that in order to avoid any prejudgment, we would not address the merits of the issues specifically raised in the application for rehearing of D.12-02-038, because these issues were to be considered during the consolidated limited rehearing proceedings. (D.12-04-050, pp. 4-5 (slip op.).)
On May 21, 2012, SPBPC timely filed the instant rehearing application, alleging that in D.12-04-050, we did not proceed in a manner required by law because we may not reopen for consideration our determination in D.11-05-026 that refunds are to be calculated based upon the market rate charged by SPBPC to STUSCO (the "SMR Rate," which it alleges is final and non-appealable) through an order for rehearing of D.12-02-038. (SPBPC's Application for Rehearing of D.12-04-050 ("SPBPC Rehrg. App"), p. 4.)
We have reviewed each and every issue raised in the application for rehearing of D.12-04-050, and are of the opinion that good cause for rehearing has not been demonstrated. Accordingly, we deny the application for rehearing of D.12-04-050.
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 There is a pending court challenge of D.11-05-026 and D.12-02-038. (San Pablo Pipeline Company LLC, et al v. Public Utilities Commission of the State of California, California Court of Appeal, Fifth Appellate District, Case No. F064501).
4 All subsequent section references are to the Public Utilities Code.
5 The Commission also ordered reconsideration of the statute of limitations issues, since they were interrelated with the calculation issues. Thus, the issues for rehearing were clarified and expanded. However, SPBPC does not challenge the lawfulness of the reconsideration of the statute of limitations issues in this rehearing application.
