TOM/t93 8/29/2001

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Wild Goose Storage, Inc. to Amend its Certificate of Public Convenience and Necessity to Expand and Construct Facilities for Gas Storage Operation.

Application 01-06-029 (Filed June 18, 2001)

SCOPING MEMO AND RULING OF ASSIGNED COMMISSIONER AND ADMINISTRATIVE LAW JUDGE

This ruling addresses the category, need for hearing, scope and schedule for this proceeding and designates a presiding officer in accordance with Article 2.5 of the Commission Rules of Practice and Procedure (Rules).

1. Summary

On June 18, 2001, Wild Goose filed this application, seeking to amend its certificate of public convenience and necessity (CPCN), which was granted by the Commission in Decision (D.) 97-06-091, in order to expand its gas storage facilities (the Wild Goose expansion).

Under its CPCN, Wild Goose owns and operates an underground natural gas storage facility in Butte County. In this application, Wild Goose seeks authorization to expand its gas storage facility to develop two additional reservoirs within the Wild Goose field, to drill 19 new wells, and to construct related facilities. Wild Goose would maintain its existing connection with Pacific Gas and Electric Company's (PG&E) Line 167 and requests that PG&E relocate a portion of Line 167, which provides local transmission services, further to the east in order to accommodate the Wild Goose expansion.

As part of the project, Wild Goose wants to transport gas to and from its customers on the PG&E Line 400/401 backbone natural gas pipeline system (the backbone system) and to interconnect with the backbone system near the Delevan compressor station (the Delevan interconnect site). Wild Goose proposes to construct an approximately 25.5 mile pipeline from its expanded storage facilities to the backbone system. Wild Goose therefore seeks confirmation from the Commission that under the Gas Storage Rules adopted in the Gas Storage Decision (D.93-02-013), PG&E is required both to interconnect its backbone system with the Wild Goose expansion at PG&E's expense and to provide Wild Goose customers who wish to transport gas through the backbone system with an equivalent level of service and charges as provided to PG&E's own gas storage customers. Wild Goose further requests a Commission determination that the benefits of the interconnection of the Wild Goose expansion with the PG&E system outweighs any related costs to PG&E.

The Wild Goose interconnection with Line 167 and the backbone system would extend into Butte and Colusa Counties.

In addition, Wild Goose seeks authorization to continue to charge market-based rates.

On July 20, 2001, PG&E filed a response which conditionally supports the application, but raises issues regarding the possible need for additional capacity on the backbone system to serve Wild Goose customers, the allocation of costs for interconnection and additional capacity, the applicability of the Gas Storage Rules to this application, the need for clarification of the "equivalent service" standard articulated in the Gas Storage Rules, the need for possible amendments to the Gas Storage Rules¹, and broader questions related to the need to expand the backbone system to meet the needs of present and future customers, including electric generators.

On July 20, 2001, the Commission Office of Ratepayer Advocates (ORA) filed a protest, seeking clarification of the cost of relocating a portion of Line 167 to interconnect with the backbone system and the allocation of these costs. ORA's protest also requests clarification of the specific ruling that Wild Goose seeks from the Commission regarding PG&E's provision of transmission service to Wild Goose through the backbone system and the definition of equivalent service.

A prehearing conference (PHC) was held on August 8, 2001 before Administrative Law Judge (ALJ) Myra Prestidge. Representatives of Wild Goose, PG&E, ORA, Southern California Gas Company, Roseville Land Development Association, the Utility Reform Network (TURN), the Kevin D. Towne and Patricia I. Towne Revocable Living Trust (Towne Trust), Lodi Gas Storage, LLC., and CalPine Corporation attended the PHC. The ALJ granted the motions to intervene of CalPine Corporation, the Towne Trust, and Roseville Land Development at the PHC.