ALJ/RAB/hl2 DRAFT Agenda ID #4725

Ratesetting

6/30/2005 Item #33

Decision ___________

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Joint Application of Royal Dutch Shell plc, N.V. Koninklijke Nederlandsche Petroleum Maatschappij (Royal Dutch Petroleum Company), and The "Shell" Transport and Trading Company, p.l.c. and Shell California Pipeline Company LLC Pursuant to P.U. Code Section 854(a) for Expedited, Ex Parte Authorization to Transfer Control of Shell California Pipeline Company, LLC

Application 05-05-026 (Filed May 26, 2005)

OPINION APPROVING THE APPLICATION

I. Introduction

This joint application is filed by Royal Dutch Shell plc (Royal Dutch Shell), N.V. Koninklijke Nederlandsche Petroleum Maatschappij (Royal Dutch Petroleum Company, hereafter Royal Dutch), The "Shell" Transport and Trading Company, public liability company (Shell Transport) and Shell California Pipeline Company LLC (Shell California, and collectively with Royal Dutch Shell, Royal Dutch and Shell Transport, the applicants) pursuant to Public Utilities Code (P.U. Code) Section 854(a) requesting authority for a technical transfer of control of Shell California due to restructuring of its ultimate parent companies, Royal Dutch and Shell Transport, which are being unified under a single parent company, Royal Dutch Shell.

Shell California is a common carrier intrastate oil pipeline company, subject to the Commission's jurisdiction pursuant to P.U. Code Sections 216 and 228. Shell California is one of numerous companies, referred to as the Royal Dutch/Shell Group of Companies, in which Royal Dutch and Shell Transport, either directly or indirectly, own investments. Shell California is indirectly owned by Royal Dutch and Shell Transport. Royal Dutch Shell will become the parent company of Royal Dutch and Shell Transport. As a result, Royal Dutch Shell will indirectly own each of Royal Dutch's and Shell Transport's ownership interests in the Royal Dutch/Shell Group of Companies, including the indirect ownership of Shell California. Under P.U. Code Section 854(a), "[n]o person or corporation, whether or not organized under the laws of this state, shall merge, acquire or control either directly or indirectly any public utility organized and doing business in this state without first securing authorization to do so from the commission." Applicants assert that while the restructuring will not change the relative ownership of Shell California's ultimate shareholders or the day-to-day management or operations of Shell California, under Commission precedent, the proposed restructuring will result in a technical change in control over Shell California which requires Commission approval.¹ As a result, applicants have filed this application for approval of a change in control of Shell California. As discussed below, this request is made in connection with the restructuring that is expected to complete in July, 2005. Applicants state that while every effort has been made by the applicants to file this application promptly, due to the complexities and logistics associated with Royal Dutch, Shell Transport, and Royal Dutch Shell being international companies and because some of the information required for this application had to be obtained from Europe, the applicants were unable to file earlier.