Background

On February 21, 2003, SFPP, LP (SFPP) filed an application pursuant to Commission Resolution No. (R.) 0-0043 issued October 24, 2002, instructing SFPP to file an application to justify its current rates for intrastate pipeline transportation of refined petroleum products. In R. 0-0043, the Commission indicated its intention to review the overall reasonableness of SFPP's existing intrastate rates in relation to a current cost-of-service showing.

The scoping memo issued by Commissioner Brown on July 5, 2003, specified that the scope of this proceeding is whether SFPP should be permitted an electricity surcharge based on a cost-of-service analysis. This scope mirrored the language of R. 0-0043 that directed SFPP to justify its rates with a cost-of-service analysis.

SFPP agrees that R. 0-0043 and the scope of this proceeding is straightforward: the Commission will evaluate the reasonableness of the electricity surcharge based on Test Year 2003 revenue requirement. The Commission will determine if SFPP's requested electric surcharge rate increase was justified from the date of its imposition by R. 0-0043 until the adoption of test year 2003 rates.

However, SFPP, is concerned that by limiting the scope of this proceeding to a cost-of-service analysis, SFPP will be foreclosed from having its intrastate pipeline rates determined in the context of the "totality of the circumstances" test that includes a variety of factors in addition to cost-of-service results.