7. Tolling Arrangements

SoCalGas and SDG&E propose that the management of their combined gas acquisition department be allowed to assist SDG&E with respect to "tolling"⁷ arrangements for wholesale power purchases to serve SDG&E's electric customers. Currently, SDG&E has a joint gas-and-electric procurement department, which operates independently of SoCalGas' gas acquisition department. The utilities contend that if the management of SoCalGas and SDG&E's gas acquisition functions are consolidated in a single department, it makes sense to allow SDG&E's electric procurement management to have access to the gas expertise of the consolidated gas procurement department, just as SDG&E's electric procurement management today has access to the gas procurement expertise of its own gas buyers.

SCGC argues that this proposal would give core priority to transportation of gas to generators with whom SDG&E has tolling arrangements. SoCalGas and SDG&E respond that merely because a tolling supply agreement was managed by the consolidated gas acquisition group would not confer any elevation in curtailment priority. ORA opposes the proposal on the ground that it is premature. SDG&E is not expected to purchase power prior to January 1, 2003, when Department of Water Resources' (DWR) authority to purchase power for SDG&E expires.

Because of the controversy regarding this issue and the paucity of evidence to support either party's position, we believe the public interest will benefit by a fuller evidentiary record. Therefore, we defer this issue to a later proceeding. ORA notes that pending resolution of this issue SDG&E's electric department can handle any needed arrangements for its power suppliers.