ALJ/CAB/tcg DRAFT 6

Agenda ID #841

7/17/02

Decision __________

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking to Require California Natural Gas and Electric Utilities to Preserve Interstate Pipeline Capacity to California.

Rulemaking 02-06-041 (Filed June 27, 2002)

OPINION ESTABLISHING RULES FOR

CALIFORNIA UTILITIES' SUBSCRIPTION TO

TURNED BACK EL PASO PIPELINE CAPACITY

I. Summary

This decision establishes two rules for California natural gas utilities, Southern California Gas Company (SoCalGas), Pacific Gas and Electric Company (PG&E), San Diego Gas & Electric Company (SDG&E), and Southwest Gas Corporation (Southwest Gas), as well as California's largest electric utilities, Southern California Edison Company (Edison), PG&E, and SDG&E, concerning subscription to turned back capacity on the El Paso Natural Gas Company (El Paso) interstate pipeline. The first rule requires the natural gas and large electric utilities to sign up for proportionate amounts of El Paso turned back capacity at specified delivery points to the extent that California replacement shippers do not sign up for the turned back capacity, and the second rule finds just and reasonable the California utilities' subscription to this turned back capacity, as well as their existing capacity rights on interstate pipelines.

This decision also identifies issues for Phase II of this proceeding and sets a prehearing conference (PHC) for September 10, 2002 at 10:00 a.m., in San Francisco, California. Some issues to be explored in Phase II are: cost allocation, capacity releases, and details concerning the guaranteed recovery in rates of the utilities'costs for subscription to interstate pipeline capacity.