VII. Conclusions of Law
1. Southwest Gas Corporation filed its Reply brief late with good cause and without prejudicing other litigants.
2. The market structure of the gas industry should be reformed cautiously in light of recent energy and gas price rises.
3. The interests of the many stakeholders in the gas industry should be balanced by approving the Interim Settlement and its appendices in part and disapproving them in part.
4. The Interim Settlement should be approved, with modifications, because it is in the public interest, reasonable in light of the record as a whole and consistent with law.
5. With regard to the choice given to the Commission in the IS, Section VI E, on how to deal with risk in storage unbundling, we should adhere to the provisions of the Joint Recommendation approved in D.00-04-060, for 50/50 ratepayer/shareholder risk-sharing.
6. Sections III, X, XI, and XIII should be modified by deleting that portion of each section limiting the Commission's ability to approve the settlement in part. Those portions of each of these sections should be disapproved.
7. Section III of the IS should be modified to set forth criteria for expansion of Wheeler Ridge, but provide that upon the meeting of that criteria, SoCalGas shall submit an application for an expansion of the receipt point capacity. That application shall be processed regularly, with all issues subject to Commission decision.
8. The modification in Section III should be in the first sentence of the first full paragraph on page 8. The words "apply to" should be inserted after "SoCalGas will". The IS language in the middle on page 8 beginning with the words "This Settlement" through the end of the paragraph, and the concomitant language in Appendix A setting the cost at $12 million in 1999 dollars should be disapproved.
9. The exemplary tariffs attached to the IS should not be approved, although SoCalGas should file similar tariffs as part of the implementation of this decision.
10. In order to deter any question of the applicability of this decision if any of the parties to the IS no longer support the IS with the modifications we make, this decision should be viewed as a decision on the record made in R.98-01-011 and I.99-07-015 and officially noticed facts, as well as an approval of the settlement as modified.
11. The provisions in this decision and the IS regarding core aggregation programs should not be construed as substantially changing the existing core aggregation program so as to exclude core aggregators from providing billing to their customers.
12. SoCalGas should withdraw Advice Letter No. 2837 and file instead a tariff embodying the IS provisions we are approving.
13. SoCalGas' Advice Letter No. 2895 and SDG&E's Advice No. 1185-G should be rejected. The protests of SCGC, CIG/CMA, TURN, Aglet and ORA should be granted.
14. Because Advice Letter No. 2895 is rejected, within 10 business days from the effective date of this decision, SoCalGas should file a new advice letter to implement a gas industry restructuring memorandum account with the restricted purpose of implementing the IS, including "developing and implementing new or enhanced computer systems" with a ceiling of $3.5 million. This advice letter should not include the provisions disapproved in Advice Letter No. 2895 at pp. 66 to 69 in this decision. The costs booked should be limited to those beginning on the effective date of this decision. The booked costs should be subject to review for their reasonableness, their duplicativeness and their incremental nature in the next BCAP.
15. As of the effective date of the tariffs arising out of this decision, the core should stop contributing to the noncore ITCS, and the noncore should pay all the noncore ITCS.
16. SoCalGas should unbundle its core interstate transportation capacity at its charged rate, with no change in the brokerage fee of $.0201/Dth.
17. The stranded costs from the unbundled core interstate transportation capacity should be paid by the core and noncore classes equally, through the end of the terms of the El Paso and Transwestern pipeline contracts or six years from the effective date of the decision, whichever is later.
18. For noncore customers, these costs shall be collected as an ECPT surcharge on all noncore throughput.
19. For core customers, these costs should be collected as follows: For the core's 50% share of the stranded costs associated with the first 7% of the core's total allocated capacity that is released, costs should be recovered on an ECPT basis from all core customers.
20. For core customers' 50% share of the stranded costs above 7%, the costs should be allocated to residential and non-residential customers proportionate to participation in the CAT program. Within the residential and non-residential classes, these costs should be allocated on an ECPT basis.
21. Bundled core customers should not be responsible overall for core ITCS that exceed more than 10% of the costs of the bundled core allocation of interstate pipeline reservation costs (not including the core ITCS allocation).
22. SoCalGas should file a rate adjustment advice letter regarding core and noncore ITCS and related matters within 30 calendar days from the effective date of this decision. The revised rates should become effective within 60 days of the effective date of this decision.
23. No core subscription contracts should be let after April 1, 2001, and contracts let between the effective date of this decision and April 1, 2001, should expire on July 31, 2001.
24. The revenues from those core subscription customers switching to core status should be recorded in the Core Fixed Cost Account.
25. The minimum size requirement for a CTA program should be reduced from 250,000 therms per year to 120,000 therms per year, with no cap on the core market share participating.
26. SoCalGas should post on its GasSelect system operating information as extensive as that required of PG&E and including post-OFO data by customer class sufficient to allow readers to understand why an OFO was called.
27. SoCalGas and SDG&E should work with customers and/or ESPs to provide customer-specific information like consumption data in consistent formats across different contexts, consistent with consumer protection and privacy considerations. Customers and/or ESPs should pay the reasonable costs of any requests for such information.
28. SoCalGas and SDG&E may file applications for rate changes based on needed expenditures to cope with customer transfers to core aggregators when 8% of total core volume. An application or BCAP proposal for a rate increase to fund, in conjunction with ESPs, necessary computer hardware, software, training and education efforts at that point should closely match customer needs instead of being well in advance of such needs.
29. SoCalGas should file a tariff in conjunction with its next BCAP to afford an opportunity to review the costs and need for utility consolidated billing service.
30. SDG&E should file a tariff along the lines of Advice No. 2950 so that utility consolidated billing for gas-only procurers is a possibility for SDG&E customers as well.
31. SoCalGas and SDG&E should provide billing credits to the customers of ESPs and CTAs if the ESPs and CTAs agree to indemnify the utilities for all direct and consequential damages and liability associated with the ESP's or CTA's modification of, or failure to provide a customer with, any utility-provided bill insert.
32. The Energy Division should first deal with any disputes concerning the content of a utility-provided insert. This process may lead to a recommendation for a resolution, with other offices of the Commission participating as parties.
33. SoCalGas should provide billing credits to ESPs and CTAs of $0.78 for each residential bill and $1.16 for each non-residential bill until another value is reached through agreement or litigation.
34. SDG&E should provide billing credits to ESPs and CTAs of $0.05 for each residential bill and $0.16 for each non-residential bill related to utility cost savings in the area of uncollectible expenses, until another value is reached through agreement or litigation.
35. SoCalGas and SDG&E should update the avoided costs of billing and uncollectibles based on more current data and include those values and any agreement on the appropriate level of billing credit in the Market Assessment Report ordered, or in a separate filing prior thereto.
36. SoCalGas and SDG&E may cease sending an ESP or CTA customer an information-only bill if that customers' CTA or ESP provides consolidated billing and agrees to provide monthly SoCalGas or SDG&E transportation charges and rate data, along with the requisite bill inserts and customer protection materials, in each end-user bill.
37. The costs of unbundling interstate transportation capacity and the retail reforms should be paid by the utilities until the next PBR or rate case.
38. SoCalGas should withdraw Advice Letter No. 2895.
39. SoCalGas should file one or more compliance advice letters to implement this decision within 10 business days from the effective date of this decision unless another provision of our order allows longer for a specific matter. The new and revised tariffs should be effective unless rejected by the Energy Division within 30 days after their filing.
40. The compliance filing should specify compliance monitoring, cost responsibility, and enforcement measures.
41. Sempra, on behalf of SoCalGas and SDG&E, should file a Market Assessment Report with the Energy Division two years after the effective date of the tariff revisions ordered in this decision, elucidating the effect on the market of the reforms instituted herein, and, in cooperation with PG&E, the effect on the market in Northern California of the reforms instituted through the earlier decisions in this docket at least through the end of 2002 and longer if desired.
42. Upon receipt of the Market Assessment Report, a new investigation may be initiated by the Commission to determine whether further reforms are needed in the gas industry structure in southern California. If initiated, such an investigation should begin by requesting responses to the utilities' market assessment report and may be consolidated or otherwise linked to extant proceedings regarding the gas industry structure in northern California.
43. The terms of the IS that are adopted, and the other reforms adopted herein should continue in place until changed by action of the Commission or its staff.
44. The proposed decision herein should be our draft report to the Legislature. The final decision should be our final report.
45. Our legislative liaison should urge the Legislature to enact our 1999 consumer protection proposed legislation.
46. This proceeding should be closed.
47. This order should be effective today, so that the restructuring provisions found in the settlement and adopted by us with modifications may be implemented expeditiously.
ORDER
IT IS ORDERED that:
1. The motion of Southwest Gas Corporation to allow the late filing of its Reply Brief is granted.
2. The Joint Motion for Approval of Interim Settlement Enhancing and Enabling Competitive Markets on the SoCalGas System, filed December 27, 1999, is granted in part and denied in part.
3. We approve sections I, II, IV, V, VI, VII, VIII, and IX and associated appendices of the Interim Settlement, which is attached in full as Appendix I to this Opinion.
4. With regard to the choice given to the Commission in the IS, Section VI E, on how to deal with risk in storage unbundling, we shall adhere to the provisions of the Joint Recommendation approved in D.00-04-060, for 50/50 ratepayer/shareholder risk sharing.
5. We do not approve sections III, X, XI, and XIII insofar as each section limits the Commission's ability to approve the settlement in part.
6. We approve that portion of Section III of the IS that sets forth criteria for expansion, but provide that upon the meeting of that criteria, SoCalGas shall submit an application for an expansion of the receipt point capacity. That application shall be processed regularly, with all issues subject to Commission decision.
7. Thus, the modification to the IS that we make is in the first sentence of the first full paragraph on page 8. The words "apply to" shall be inserted after "SoCalGas will". We specifically disapprove the IS language in the middle on page 8 beginning with the words "This Settlement" through the end of the paragraph, and the concomitant language in Appendix A setting the cost at $12 million in 1999 dollars.
8. We do not approve the exemplary tariffs filed along with the IS, although we expect similar tariffs to be filed as part of the implementation of this decision.
9. The provisions regarding core aggregation programs shall not be construed as substantially changing the existing core aggregation program so as to exclude core aggregators from providing billing to their customers.
10. SoCalGas shall withdraw Advice Letter No. 2837 and file instead a tariff embodying the IS provisions we are approving.
11. SoCalGas' Advice No. 2895 and SDG&E's Advice Letter No. 1185-G are rejected. The protests of SCGC, CIG/CMA, TURN, Aglet and ORA are granted.
12. Because Advice Letter No. 2895 is rejected, within 10 business days from the effective date of this decision, SoCalGas shall file a new advice letter to implement a gas industry restructuring memorandum account with a ceiling of $3.5 million and the restricted purpose of implementing the IS including "developing and implementing new or enhanced computer systems". This advice letter shall not include the provisions disapproved in Advice Letter No. 2895 at pp. 66 to 69 in this decision. The costs booked shall be limited to those beginning on the effective date of this decision. The booked costs shall be subject to review for their reasonableness, their duplicativeness and their incremental nature in the next BCAP.
13. The costs of unbundling core interstate transportation capacity and the retail reforms shall be paid by the utilities until the next PBR or rate case.
14. As of the effective date of the tariffs arising out of this decision, the core shall stop contributing to the noncore ITCS, and the noncore shall pay all the noncore ITCS.
15. SoCalGas shall unbundle its core interstate transportation capacity at its charged rate, with no change in the brokerage fee of $.0201/Dth.
16. The stranded costs from the unbundled core interstate transportation capacity shall be paid by the core and noncore classes equally, through the end of the terms of the El Paso and Transwestern pipeline contracts or six years from the effective date of the decision, whichever is later.
17. For noncore customers, these costs shall be collected as an ECPT surcharge on all noncore throughput.
18. For core customers, these costs shall be collected as follows: For the core's 50% share of the stranded costs associated with the first 7% of the core's total allocated capacity that is released, costs shall be recovered on an ECPT basis from all core customers.
19. For core customers' 50% share of the stranded costs above 7%, the costs shall be allocated to residential and non-residential customers proportionate to participation in the CAT program. Within the residential and non-residential classes, these costs shall be allocated on an ECPT basis.
20. Bundled core customers shall not be responsible overall for core ITCS that exceed more than 10% of the costs of the bundled core allocation of interstate pipeline reservation costs (not including the core ITCS allocation).
21. SoCalGas shall file a rate adjustment advice letter regarding core and noncore ITCS and related matters within 30 calendar days from the effective date of this decision. The revised rates will become effective within 60 days of the effective date of this decision.
22. No core subscription contracts shall be let by either SoCalGas or SDG&E after April 1, 2001, and contracts let between the effective date of this decision and April 1, 2001, must expire on July 31, 2001.
23. The revenues from those core subscription customers switching to core status shall be recorded in the Core Fixed Cost Account.
24. The minimum size requirement for a CTA program shall be reduced from 250,000 therms per year to 120,000 therms per year, with no cap on the core market share participating for both SoCalGas and SDG&E.
25. SoCalGas shall post on its GasSelect system operating information as extensive as that required of PG&E and including post-OFO data by customer class sufficient to allow readers to understand why an OFO was called.
26. SoCalGas and SDG&E shall work with customers and/or ESPs to provide customer-specific information like consumption data in consistent formats across different contexts, consistent with consumer protection and privacy considerations. Customers and/or ESPs shall pay the reasonable costs of any requests for such information.
27. SoCalGas and SDG&E may file applications for rate changes based on needed expenditures to cope with customer transfers to core aggregators when 8% of total core volume has switched from utility procurement to core aggregator procurement. Such applications shall include provision for ESP or CTA contribution.
28. SDG&E shall file a tariff along the lines of Advice No. 2950 so that utility consolidated billing for gas only procurers is a possibility for SDG&E customers as well.
29. SoCalGas, and SDG&E shall provide billing credits to the customers of ESPs and CTAs if the ESPs and CTAs agree to indemnify the utilities for all direct and consequential damages and liability associated with the ESP's or CTA's modification of, or failure to provide a customer with, any utility-provided bill insert.
30. SoCalGas shall provide billing credits to ESPs and CTAs of $0.78 for each residential bill and $1.16 for each non-residential bill until another value is reached through agreement or litigation.
31. SDG&E shall provide billing credits to ESPs and CTAs of $0.05 for each residential bill and $0.16 for each non-residential bill related to utility cost savings in the area of uncollectible expenses, until another value is reached through agreement or litigation.
32. SoCalGas and SDG&E shall update the avoided costs of billing and uncollectibles based on more current data and include those values and any agreement on the appropriate level of billing credit in the Market Assessment Report ordered, or in a separate filing prior thereto.
33. SoCalGas and SDG&E may cease sending an ESP or CTA customer an information-only bill if that customers' CTA or ESP provides consolidated billing and agrees to provide monthly SoCalGas or SDG&E transportation charges and rate data, along with the requisite bill inserts and customer protection materials, in each end-user bill.
34. The Commission, through its Energy Division, shall undertake to resolve any disputes concerning the content of a utility-provided bill insert. Any other division of the Commission may participate as necessary.
35. SoCalGas shall file compliance advice letters to implement this decision within 10 business days from the effective date of this decision except for those provisions of this decision for which we have explicitly ordered that more time can be taken. The new and revised tariffs shall be effective unless rejected by the Energy Division within 30 days after their filing.
36. The compliance filing shall specify compliance monitoring, cost responsibility, and enforcement measures.
37. Sempra, on behalf of SoCalGas and SDG&E, shall file a Market Assessment Report with the Energy Division two years after the effective date of the tariff revisions ordered in this decision, elucidating the effect on the market of the reforms instituted herein, and, in cooperation with PG&E, the effect on the market in Northern California of the reforms instituted through the earlier decisions in this docket at least through the end of 2002 and longer if desired.
38. Upon receipt of the Market Assessment Report, a new investigation may be initiated to determine whether further reforms are needed in the gas industry structure in southern California. Such an investigation, if any, shall begin by requesting responses to the utilities' market assessment report and may be consolidated or otherwise linked to extant proceedings regarding the gas industry structure in northern California.
39. The terms of the IS that are adopted, and the other reforms adopted herein shall continue in place until changed by action of the Commission or its staff.
40. The Commission's Legislative Liaison shall provide to the Legislature the proposed decision herein as our draft report and the final decision as our final report. The Commission's legislative liaison shall continue to urge the Legislature to enact the consumer protection legislature sent in conjunction with D.99-07-015 in 1999.
41. This proceeding is closed.
This order is effective today.
Dated __________ , 2000, at San Francisco, California.
ATTACHMENT A
LIST OF APPEARANCES
Dave` Finigan |
Marc D. Joseph Attorney At Law |
|
Harold Orndorff |
Kevan Hensman |
|
James Weil |
Christine H. Jun |
|
Evelyn Kahl Elsesser |
Jennifer Tachera |
|
Karen Norene Mills |
Michael Rochman |
Page 2
Dan L. Carroll |
Gregory T. Blue |
Joseph M. Paul |
Lynn M. Haug |
Andrew J. Skaff |
Darwin Farrar |
Steven Kelly |
Mark A. Baldwin |
Page 3
Edward W. O'Neill |
Norman A. Pedersen |
Mark Moench |
Jose Atilio Hernandez |
Ronald G. Oechsler |
Donald D. Dame |
Steve Frank |
Edward V. Kurz |
Page 4
|
Alan C. Reid |
John J. Cattermole |
Patrick J. Power |
Kelvin Yip |
Andrew W. Bettwy |
John C. Walley |
Lyn Hebert |
Keith Mc Crea |
Page 5
Marcel Hawiger |
Robert B. Weisenmiller |
Robert J. Gloistein |
Randy Litteneker |
Thomas C. Roth |
Chris King |
(END OF ATTACHMENT A)
APPENDIX I
INTERIM SETTLEMENT ENHANCING AND ENABLING
COMPETITIVE MARKETS ON THE SOCALGAS SYSTEM
Note: See CPUC Formal Files for SoCalGas Pooling portion of Appendix I.
APPENDIX II
COMPARISON OF COMPREHENSIVE, INTERIM,
AND POST INTERIM SETTLEMENTS
APPENDIX III
LIST OF ACRONYMS
SOCALGAS - Southern California Gas Company
SDG&E - San Diego Gas and Electric Company
IS - Interim Settlement Agreement
PI - Post-Interim Settlement Agreement
CS - Comprehensive Settlement Agreement
OFO - Operational Flow Order
ITCS - Interstate Transition Cost Surcharges
PG&E - Pacific Gas and Electric Company
CAT - Core Aggregation Transportation
BCAP - Biannual Cost Allocation Proceeding
NSBA - Noncore Storage Balancing Account
ORA - Office of Ratepayer Advocates
ESP - Energy Service Provider
ECPT - Equal-Cents-Per-Therm
ALJ - Administrative Law Judge
TURN - The Utility Reform Network
UDC - Utility Distribution Company
GIRMA -General Industry Restructuring Memorandum Account?
IRMA - Industry Restructuring Memorandum Account
SCGC - Southern California Generation Coalition
MFV - Modified-Fixed Variable?
LRMC - Long-Run Marginal Cost
PBR - Performance-Based Ratemaking
NFCA - Noncore Fixed Cost Account
CFCA - Core Fixed Cost Account
DASR - Direct Access Service Request
