FINDINGS

1. Shipments of petroleum products through the South Livermore to Fremont system fill a critical need and must continue.

2. The pipeline passes through the property owned by the City of San Francisco, very close to the San Antonio Reservoir.

3. The City of San Francisco is concerned that a pipeline leak would contaminate San Antonio Reservoir.

4. As a condition for renewing its lease, CPL agreed with the City of San Francisco on mitigation measures including relocation of the pipeline off of the City's property.

5. The mitigation measures will require substantially more investment in the pipeline.

6. CPL submitted a results of operation analysis based on a 7.32% rate of return.

7. We find CPL's actual proposed rate of return to be 8.35%.

8. CPL's forecast 2002 revenues, operating expenses, and rate of return of 8.35% are reasonable.

9. We should approve CPL's requested rate increase of $0.045/bbl.