IV. Comments and Replies on Draft Decision
The draft decision of ALJ Sullivan in this matter was mailed to the parties in accordance with Pub. Util. Code § 311(g)(1) and Rule 77.7 of the Rules of Practice and Procedure. We received joint opening comments from ABAG POWER and SPURR on November 15, 2001. No party filed reply comments.
1. On June 1, 2001, ABAG POWER and SPURR jointly filed a petition to modify D.97-12-032.
2. The Petition could not have been filed within a year of the effective date of D.97-12-032 because it was impossible to anticipate the market developments that have necessitated this filing.
3. The Commission has previously developed capacity assignment rules that apply to the core aggregation program on the PG&E system.
4. The core aggregation program expands the choices available to core gas customers on the PG&E system.
5. The Commission has supported expansion of customer choice in previous Commission decisions.
6. Permitting core customers a choice of gas suppliers enables them to shop for better prices and provides incentives for the core utility to match market prices. Thus, customer choice benefits all core customers.
7. A diversity of gas suppliers and gas contracts acts as a hedge of volatile energy markets.
8. California natural gas markets have exhibited high volatility over the last year.
9. In the last year, highly volatile gas transportation costs on the ANG and NOVA pipelines have at times dwarfed the price of gas.
10. Over the period of the Gas Accord, the market value of the ANG and NOVA pipeline capacity has exceeded the as-billed cost. Thus, there are no net "hedge" costs that bundled core customers have borne for reserving capacity on the ANG and NOVA pipelines.
11. ABAG POWER and SPURR are organized as buying cooperatives that pass cost savings on to their members.
12. If a gas aggregator fails to pass on transportation savings to its customers, the customers can elect to shift their service to the core utility. This provides incentives for core aggregators to pass on transportation savings to their customers.
13. Permitting core aggregators to reserve transport capacity on the Canadian NOVA and ANG systems would have led to an increase to other core customers of approximately 1 percent last year. At current market conditions, other core customers would see no price change.
14. Permitting core aggregators to reserve transport capacity on the Canadian NOVA and ANG systems will help stabilize gas provisioning by core aggregators and reduce the return of customers to the bundled core.
15. If customers elect to return to the bundled core, the core utility must provide service to them and acquire the transmission capacity needed.
16. Core aggregators did not previously have an opportunity to reserve transmission capacity on the NOVA and ANG systems.
17. Adopting restrictions on eligibility for the assignment of capacity on the NOVA and ANG pipelines is necessary to stabilize the current core aggregation market without subsidizing its expansion.
18. Limiting the assignment of capacity on the ANG and NOVA pipelines to current core aggregators will prevent the expansion of the core aggregation program by those seeking to arbitrage transmission costs.
19. Limiting the assignment of PG&E's ANG and NOVA capacity to a one-year term serves to discourage those seeking to arbitrage "as-billed" and market transmission prices.
20. There is no need to alter the current monthly option for core aggregators with respect to PGT capacity in order to prevent subsidization of the expansion of core aggregation.
1. Because the market developments that necessitated the Petition could not have been presented within a year of the effective date of D.97-12-032, the Petition qualifies for Commission consideration consistent with Rule 47 (d) of the Commission's Rules of Practice and Procedure.
2. Stabilizing the core aggregation market is consistent with §§ 328 - 328.2 of the Public Utilities Code.
3. The assignment of capacity on ANG and NOVA to core aggregators will not result in unreasonable price increases to unbundled core customers.
4. Restricting the assignment of capacity on ANG and NOVA to current core aggregators is reasonable.
5. Limiting the assignment of capacity on ANG and NOVA to a one-year allocation, through and until the end of the Gas Accord, is reasonable.
6. Requiring those who elect an assignment of ANG and NOVA capacity to forfeit their existing option to choose PGT capacity on a monthly basis is not necessary to achieve the objective of a stable core aggregation program.
7. The assignment of capacity on ANG and NOVA to core aggregators, subject to the restrictions enumerated above, is reasonable and in the public interest.
8. This proceeding should be closed.
IT IS ORDERED that:
1. We grant the Petition to the extent described in ordering
paragraphs 2 and 3.2. We modify Decision (D.) 97-12-032 by replacing the language at 77 CPUC 2d 101 (item 3) with the following:
For the duration of the Gas Accord, a core aggregator shall be limited to a proportionate assignment of upstream Canadian capacity based on the average size of the core aggregator's load for the year ending June 1, 2001 (the date the Petition was filed).
The assignment of PG&E's ANG and NOVA capacity will be a one-year allocation of capacity, through and until the end of the Gas Accord. There will be no "monthly option" on the ANG and NOVA capacity.
Finally, There shall be no allocation of capacity to new core aggregators.
3. PG&E shall submit a compliance advice letter within ten days after the effective date of this decision incorporating revised tariff sheets that implement this decision.
4. The option of core aggregators to elect an assignment of ANG and NOVA capacity shall become effective as of the first day of the month that is thirty days after the date when PG&E files its compliance advice letter.
5. We further order that the wording in ordering paragraph number 2 shall replace language that appears in the Gas Accord settlement (D.97-08-055, Appendix B at 73 CPUC 2d 829 (item F.1.b.ii)).
6. This proceeding is closed.
This order is effective today.
Dated , at San Francisco, California.
