2. Background

Crimson California Pipeline, L.P. (Applicant) is a California limited partnership authorized to do business in the State of California. Its general partner is Crimson Pipeline Management, Inc., a California corporation, whose parent, Crimson Resource Management Corp., a Colorado corporation, currently operates in excess of 30 petroleum production properties located in four different California counties, with the bulk of its operations in Kern County. Crimson is a public utility, subject to the Commission's jurisdiction pursuant to Pub. Util. Code § 216. Specifically, Crimson is a pipeline corporation as defined by Pub. Util. Code § 228, which owns and operates certain oil pipeline facilities in Southern California. Crimson currently owns and operates six common carrier crude oil pipeline systems. Two of these systems, the Line 600 pipeline system and its associated gathering pipelines and the Line 700 pipeline system and its associated gathering pipelines, were recently acquired from ConocoPhillips Pipeline Company (ConocoPhillips) with approval by the Commission in Decision (D.) 07-12-046. After authorizing the acquisition of these two systems, the Commission in D.08-11-047 also granted Crimson authority to encumber the Line 600 and Line 700 assets with a lien in favor of Bank of Oklahoma (BOK) as additional security for a line of credit extended to Crimson by BOK.

The Line 600 pipeline system includes approximately 100 miles of pipe, three tanks with over 200,000 barrels of storage capacity and a crude oil truck unloading facility. The Line 700 system includes over 30 miles of pipe, one tank with approximately 5,000 barrels of storage capacity, and a crude oil truck unloading facility. As noted in D.07-12-046, as part of the purchase and sale agreement between Crimson and ConocoPhillips, portions of both the Line 600 and Line 700 pipeline systems were idled because these pipeline systems run generally parallel with the pipeline systems that Crimson already owns. However, all receipt and delivery points on both the Line 600 and the Line 700 system have been maintained.

The Line 700 pipeline system has been interconnected with another Crimson-owned pipeline system (Brea Crude) and Brea Crude has been converted from a private pipeline to a public utility pipeline pursuant to the terms of Advice Letter 6, dated May 30, 2008. This application seeks to increase rates on the Line 600 and Line 700 (including Brea Crude) pipeline systems. Current rates for those systems have been in effect and unchanged since January 1, 1992.