4. Scope of the Proceeding
The scope of this proceeding involves an interplay between issues that the Commission must decide to rule upon the application pursuant to Pub. Util. Code § 1001 and 1002 and to determine compliance with the California Environmental Quality Act (CEQA), and broader issues raised by PG&E and other parties. In deciding the scope for this proceeding, we have determined to address all issues necessary for a Commission decision on the application and to give the parties clear direction on implementation, while reserving some of the broader issues raised by PG&E and other parties to a future proceeding which sets policy on an industry-wide basis or specifically for PG&E, such as the PG&E Gas Accord II.2
As discussed in section 5 below regarding the schedule, this proceeding will be divided into three phases in order to issue a timely decision on the application. We plan to issue a decision on the application and certification of the environmental impact report (EIR) after the first two phases and a subsequent decision after the third phase, if a third phase is necessary.
In Phase I, we shall consider non-environmental issues related to whether the statutory requirements for amendment of the CPCN have been met, whether the Gas Storage Decision and Gas Storage Rules apply to this proceeding, the definition of equivalent service, identification of necessary facilities for interconnection, metering and compression and the allocation of costs for these facilities, the relocation of Line 167 and the allocation of related costs, whether PG&E has existing capacity on the backbone system to serve customers of the Wild Goose expansion, the level of service that PG&E could provide to customers of the Wild Goose expansion without the addition of backbone system capacity or impacts on PG&E customers, and whether PG&E should be required to expand the backbone system to accommodate the Wild Goose expansion.
In Phase II, we shall consider environmental issues related to the project through the environmental review (CEQA) process. We plan to hold a public participation hearing (PPH) in the local community after the draft EIR is issued to give the public and affected property owners an opportunity to comment on both the environmental issues and the application. A schedule for the Commission CEQA process on this application is attached as Appendix A. Persons who would like more information may call the Commission CEQA Hotline at (4l5) 703-2126.
The parties shall address any issues related to the EIR and environmental issues through the Commission CEQA process.3 However, if necessary, we may hold further evidentiary hearings or require additional briefing on issues raised in the EIR.4
Phase III will be necessary only if the Commission determines that PG&E does not have sufficient capacity on the backbone system to accommodate the project without impacting PG&E customers and that it should be required to increase capacity to serve customers of the Wild Goose expansion. These issues will generally include the level of expansion of the backbone system necessary to serve the customers of the Wild Goose expansion and the manner for allocating the costs of expansion of the backbone system. Phase III may be unnecessary if the PG&E Gas Accord II or another broader proceeding is filed and addresses these kinds of issues.
The specific issues to be addressed in each phase of this proceeding are:
Phase I - CPCN Issues
A. Whether, pursuant to Pub. Util. Code §§ 1001 and 1002, Wild Goose has demonstrated that the present or future public convenience and necessity require or will require the Wild Goose expansion. Sub-issues to be addressed include:
(1) Need for the project. (The Commission must address this issue pursuant to Pub. Util. Code §§ 1001 and 1002, as well as to develop a record to determine whether or not there is evidence to support a statement of overriding considerations, if necessary, with respect to certification of the EIR.)
a. The effect of the project on community values, recreational and park areas, and historic values, pursuant to Pub. Util. Code § 1002. (Although Pub. Util. Code § 1002 requires consideration of the influence of the project on the environment, environmental issues shall be considered in the CEQA process.)
b. The non-environmental effects of the project on properties located in the area of the Wild Goose expansion, including pipelines.
B. Whether Wild Goose is a public utility for the purpose of exercising the power of eminent domain.
C. Whether Wild Goose's request to continue charging market-based rates is reasonable.
D. Whether the Gas Storage Decision and the Gas Storage Rules apply to this proceeding.
E. Issues related to the connection of the Wild Goose expansion with the PG&E system, including Line 167, including:
(1) As much information regarding the project's capabilities as the parties can provide, including firm daily injection and withdrawal capabilities, and the range of project's capabilities that define the limits of the project;
(2) Identification of necessary interconnection and compression facilities, the capacities associated with the interconnection and compression points, and the extent to which the facilities are standard or special for cost allocation purposes;
(3) If PG&E provides a new metering station adjacent to the Delevan Compressor Station as proposed by Wild Goose, whether PG&E may require Wild Goose facilities to be located an adequate distance from the compressor station, that PG&E's access rights are maintained and that appropriate easement rights are obtained at no cost to PG&E;
(4) Whether Line 167 should be relocated to the east to accommodate the Wild Goose expansion and if so, the allocation of costs for the relocation;
(5) The manner in which costs for new or expanded facilities for interconnection, metering and compression (other than the backbone system) should be allocated.
F. Whether PG&E must provide equivalent service to customers of the Wild Goose expansion, including:
(1) The criteria for determining whether PG&E is providing equivalent service to customers of the Wild Goose expansion;
(2) The relationship of equivalent service under the Gas Storage Rules to PG&E Tariff Rules 2(C), regarding Special Facilities and 14, regarding Capacity Allocation and Constraint of Natural Gas Service;
(3) Whether equivalence of service between customers of the Wild Goose expansion and PG&E's own storage customers is physically possible in view of the different locations and distances from the backbone system of Wild Goose expansion customers and PG&E storage customers;
(4) The effects of interconnection of the Wild Goose expansion, along with the Lodi project, with the backbone system on service to PG&E's existing customers and system operations;
(5) The level of service that PG&E could provide to customers of the Wild Goose expansion, without expansion of the backbone system or negative impacts on PG&E customers;
(6) Whether PG&E's backbone system will have sufficient capacity to provide transportation service to customers of the Wild Goose expansion when Wild Goose is ready to interconnect the expansion with the backbone system;
(7) If the backbone system will not have sufficient capacity to accommodate customers of the Wild Goose expansion, whether PG&E be required to expand capacity to serve them;
(8) Since PG&E's Gas Accord I will expire on December 31, 2002, whether sub issues (6) and (7) above and the issues designated for consideration in Phase III should be determined in the Gas Accord II proceeding.
G. Whether any agreement reached by Wild Goose and PG&E regarding necessary facilities interconnection, metering and compression, expansion of capacity on the backbone system, allocation of costs and other relevant issues is reasonable and fair to customers of the Wild Goose expansion and PG&E ratepayers.
H. Whether Wild Goose and PG&E should be required to develop a balancing agreement for the Wild Goose expansion.
Phase II - CEQA (EIR) Issues
A. Whether the project causes significant impacts on the environment.
B. If so, whether these significant environmental impacts can be mitigated.
C. If one or more significant environmental impacts cannot be mitigated, whether certification of the EIR and approval of the project through the adoption of a statement of overriding considerations is appropriate.
D. Whether issues raised in the EIR require further evidentiary hearings or briefing. (This issue may be addressed, if at all, after the draft EIR issues.)
Phase III - Backbone System Expansion and Cost Allocation Issues (If Necessary)
A. The level of expansion of the backbone system that would be required to serve the Wild Goose expansion and identification of the associated costs.
B. Apportionment of the costs of expansion of the backbone system between PG&E and Wild Goose, including:
(1) Whether Wild Goose and its customers should bear all or part of the costs of expansion of the backbone system;
(2) Whether expansion of the backbone system would be a standard facility or a special facility for cost allocation purposes;
(3) Whether a cost-benefit analysis be utilized in determining the allocation of costs for adding capacity to the backbone system to serve customers of the Wild Goose expansion. If so, whether the benefits of the Wild Goose expansion to PG&E's system exceed these costs;
(4) The appropriate mechanism for recovery of these costs.
2 The issues deferred to a broader future proceeding include whether the Gas Storage Rules are outdated and should be amended; priorities for the allocation of service on the backbone system; the criteria for determining the level of backbone capacity that the Commission believes is appropriate for the market; identification of the planning standard to be used to determine the capacity of the backbone system to support transmission to customers of out-of-state gas supply and simultaneously to the operations of independent gas storage providers accessing the backbone system; whether P G & E should maintain additional slack capacity on the backbone system to support competition between the marginal supply basin and storage; the appropriate amount of slack capacity to be maintained; the impact of electric generation plants which are being planned in the area of the backbone system on P G & E's ability to serve customers of the Wild Goose expansion; whether, if Wild Goose were authorized to connect to an interstate pipeline in the future, this connection would affect the level of reliability that P G & E should provide on the backbone system for Wild Goose customers; and rate issues. 3 See Rule l7.1. 4 For example, further evidentiary hearings may be necessary if parties need to amend their positions or supplement their testimony in response to information contained in the EIR that was not previously available.
