Procedural Background
The Commission issued Order Instituting Rulemaking (R.) 02-10-001 on October 3, 2002, to determine broad policy issues and adopt a long-term framework to implement AB 1002 (Stats 2000, Ch. 932). R.02-10-001 divided the proceeding into two parts: Gas Surcharge Determination and Program Administration. In each area, questions were posed addressing accounting, documentation, customer exemptions, cash flow and R&D. The Commission preliminarily determined that R.02-10-001 is a quasi-legislative proceeding, as that term is defined in Rule 5(d) of the Commission's Rules of Practice and Procedure (Rules).
Respondent parties2 submitted comments and reply comments to the questions posed in R.02-10-001 on November 12 and 27, 2002, respectively.
A prehearing conference (PHC) was held February 5, 2003 to establish a service list, and address procedural issues and scheduling matters. Parties at the PHC agreed that issues concerning the policy and implementation of AB 1002 could be resolved through workshops and data requests. Two parties recommended that evidentiary hearings be held to address R&D issues.
On April 22, 2003, the Assigned Commissioner, Loretta M. Lynch, issued an Assigned Commissioner's Ruling (ACR) determining the category, need for hearing, scope and schedule of the proceeding. The ACR divided R.02-10-001 into two phases. The First Phase addresses issues concerning policy and implementation of AB 1002 through a workshop. The ACR attached a list of questions and issues to be resolved in the Phase One workshop. A workshop on Phase One issues was held from May 7, 2003, through May 9, 2003, led by the Energy Division.3
Phase Two addresses R&D issues, including defining public interest R&D, project identification and evaluation, and establishing funding levels. On June 3, 2003, a ruling by the assigned Administrative Law Judge (ALJ) established a schedule, and posed questions for parties to be addressed in Phase Two of the proceeding.4 PG&E, Sempra, The University of California, California Institute for Energy Efficiency (UC), CEC and Southern California Generation Coalition (SCGC) submitted opening testimony on August 15, 2003. PG&E, Sempra, UC and CEC submitted reply testimony on September 5, 2003. Evidentiary hearings were held September 25 and 26, 2003. Opening and reply briefs were filed on October 22 and November 5, 2003, respectively. The matter was deemed submitted on November 5, 2003.
On December 9, 2003, the Energy Division filed its Workshop Report on Phase One issues. PG&E, Sempra, Avista and Southwest5 filed comments on the Workshop Report on January 12, 2004.
2 R.02-10-001 names Pacific Gas and Electric Company (PG&E), Southern California Gas Company (SoCalGas), San Diego Gas and Electric Company (SDG&E), Avista Utilities (Avista), Alpine Natural Gas Operating Company (Alpine), Southern California Edison Company (Edison) Southwest Gas Corporation (Southwest) West Coast Gas Company (West Coast) and Mountain Utilities as Respondents. SoCalGas and SDG&E are jointly represented by Sempra Energy Utilities (Sempra). On October 16, 2002, Mountain Utilities requested by letter that it be excused from participation in the proceeding as it only sells propane, and that as provided in Sections 222, 216, and 221 of the Public Utilities Code, propane companies are not considered natural gas corporations. In letters dated October 31, 2002, and November 21, 2002, Edison requested that it be excused as a respondent in the proceeding since it only provides liquefied petroleum gas and propane to Santa Catalina Island customers. On February 10, 2003, West Coast requested by letter that it be excused from participation in the proceeding due to a lack of resources, and because the costs of participation are significant relative to the small number of customers served by West Coast. On February 12, 2003, Avista filed a motion for exemption from in-person participation in the R&D portion of the proceeding. Avista explains that it has limited R&D activities and that the costs of participation may be significant relative to the small number of customers served by Avista. On March 7, 2003, Alpine filed a motion to be excused from participation in this proceeding due to a lack of resources that may negatively impact its service to customers. On April 14, 2003, Southwest filed a motion requesting that it be excused from participation in the R&D phase of this proceeding. Southwest explains that it does not conduct any R&D, and that its customers will best be served if Southwest's participation is limited to monitoring the R&D portion of the proceeding. These requests and motions are unopposed, and for the reasons stated by these utilities, the requests and motions from further participation are granted. 3 On May 7, 2003, Sempra filed a motion to modify the ACR to provide issuance of an interim decision on Phase One issues after parties file comments on the Workshop Report. However, the Workshop Report was not filed until December 9, 2003, and comments were not received until January 12, 2004. As a matter of efficiency, Phase One and Phase Two issues are combined in this decision and Sempra's motion is denied. 4 See ALJ Ruling, Attachment A. 5 Southwest filed a motion to accept its comments one day late on January 13, 2004. That motion is unopposed and is granted.
