ALJ/JSW/jva/sid Date of Issuance 12/5/2008
Decision 08-12-020 December 4, 2008
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
In the Matter of the Application of San Diego Gas & Electric Company (U 902 G) and Southern California Gas Company (U 904 G) for Authority to Revise Their Rates Effective January 1, 2009, in Their Biennial Cost Allocation Proceeding. |
Application 08-02-001 (Filed February 4, 2008) |
DECISION REGARDING THE PHASE ONE ISSUES
AND THE MOTION TO ADOPT THE SETTLEMENT AGREEMENT
TABLE OF CONTENTS
Title Page
DECISION REGARDING THE PHASE ONE ISSUES AND THE MOTION TO ADOPT THE SETTLEMENT AGREEMENT 2
1. Summary 2
2. Background 3
3. Discussion 5
3.1. Overview of the Phase One Issues 5
3.2. The Settlement Agreement's Proposed Recommendations 6
3.3. Should the Proposed Settlement Agreement Be Adopted? 10
3.3.1. Combined Core Storage 11
3.3.2. Wholesale Core Customers 12
3.3.3. Total Storage Capacity and the Unbundled
Storage Program 16
3.3.4. Treatment of Unbundled Storage Revenues and Hub Revenues 19
3.3.5. Balancing 22
3.3.6. Prices for Storage Services 24
3.3.7. Future Storage Expansions 25
3.3.8. Storage Accounts 27
3.4. Conclusion 30
4. Comments on Proposed Decision 31
5. Assignment of Proceeding 31
Findings of Fact 32
Conclusions of Law 33
O R D E R 34
ATTACHMENT 1 - Settlement Agreement
DECISION REGARDING THE PHASE ONE ISSUES
AND THE MOTION TO ADOPT THE SETTLEMENT AGREEMENT
1. Summary
This decision addresses the Phase One issues in the cost allocation proceeding filed by San Diego Gas & Electric Company (SDG&E) and Southern California Gas Company (SoCalGas) regarding their natural gas transmission and storage services.
Following the close of evidentiary hearings in Phase One, SDG&E, SoCalGas, and nine other parties filed a joint motion "For Adoption of Settlement Agreement and Immediate Suspension of Briefing Schedule for Phase One Issues" (motion to adopt the Settlement Agreement).1 The Settlement Agreement addresses all of the Phase One issues, and the balancing issues that were to be addressed in Phase Two.
Today's decision grants the motion to adopt the Settlement Agreement and the terms of the Settlement Agreement are adopted. The Settlement Agreement's balancing of the various interests of the different parties will ensure that core and noncore customers in southern California will have sufficient storage services during the term of the Settlement Agreement, while providing monetary incentives to SDG&E and SoCalGas to encourage them to expand the storage assets for the unbundled storage program. Among other things, the Settlement Agreement resolves the total amount of gas storage inventory, storage injection, and storage withdrawal capacities that will be made available for balancing purposes and to the core and noncore customers in southern California over the six-year term of the Settlement Agreement. The Settlement Agreement provides that the wholesale core customers will pay for the storage services at the same rates that the combined core customers of SDG&E and SoCalGas pay.
The Settlement Agreement also resolves the sharing mechanism that ratepayers and shareholders will use to allocate the net revenues from the sales of unbundled storage revenues and from hub services. The Settlement Agreement also provides that any future expansion of the storage assets for the unbundled storage program will be subject to this sharing mechanism as well.
The various provisions of the Settlement Agreement are discussed in more detail in Sections 3.2. and 3.3. of this decision.
1 The Settlement Agreement was attached to the joint motion as Appendix A, and is attached to this decision as Attachment 1.
