XVI. Core Aggregation Transportation Service
A. Summary
Core customers have the choice of being provided with default service by PG&E, or core gas customers may choose to take service from gas ESPs who serve core customers under the Core Aggregation Transportation (CAT) program.
The CAT program was originally adopted on a trial basis in D.91-02-040 (39 CPUC2d 360). In D.95-07-048 (60 CPUC2d 519) a settlement was adopted which modified the CAT program. D.95-07-048 also ordered PG&E and the two other gas utilities to submit core customer tariffs to unbundle interstate transportation rates.97 As part of the Gas Accord, a number of provisions pertaining to core aggregation were addressed in the agreement. (See 73 CPUC2d at pp. 827 - 832.) The Comprehensive Gas OII Settlement Agreement, adopted in D.00-05-049, made changes to how gas ESPs serving core customers are provided with core storage.
PG&E proposes several modifications to the current transportation and storage capacity options for gas ESPs. PG&E contends that these changes are needed in order to adopt the program to the reliability and core procurement proposals that PG&E has proposed.
1. Winter Firm Capacity Requirement Proposal
PG&E's first proposal is that gas ESPs serving core customers be subject to the same Winter Firm Capacity Requirement that is proposed for PG&E's Core Procurement Department, as described in Chapters 4 and 16 of Exhibit 1. PG&E proposes that beginning in the winter of 2004-2005, all core suppliers, including gas ESPs, be required to hold firm capacity rights to meet a 1-in-10 year cold temperature event for the sum of the group's forecasted loads. PG&E contends that this requirement will help standardize the availability and reliability of core supply regardless of whether it is a gas ESP or PG&E's Core Procurement Department serving the load.
In order to allow gas ESPs to meet this requirement, PG&E proposes that gas ESPs be given an option to take a pro rata share of the PG&E core holdings that are outlined in Chapter 16 of Exhibit 1 and other contract rights that are included in PG&E's CPIM. To ensure that gas ESPs have the firm capacity needed to meet the Winter Firm Capacity Requirement, PG&E proposes that gas ESPs of significant size, i.e., three percent or more of the core peak load, be required to provide documentation to PG&E of this capacity prior to the start of the winter season.
PG&E proposes that gas ESPs that serve less than three percent of the core peak load not be required to submit this verification. However, they will still be expected to hold, and will be offered, sufficient firm rights to meet this requirement. In PG&E's view, verification is not necessary because the flow order penalties create incentives to meet demand, and if the gas ESP fails to supply the gas, it is unlikely to have a large effect on the system.
2. Transportation Capacity Proposal
PG&E's second proposal is to offer to each gas ESP serving core customers an annual option to a pro rata share of each of the pipeline paths98 held for core customers to: (1) Alberta-basin gas; (2) Southwest or Rocky Mountain-basin gas; (3) San Juan-basin gas; and (4) Topock gas. The pro rata allocation will be based on peak January loads of the gas ESPs' customer mix.99 Gas ESPs will be offered and be required to take or reject100 for the coming year of April through March, for each Core Transport path, a set of capacity rights in equal proportion to the amounts of each segment of the path as is held by PG&E for core customers and is included in the CPIM. During each month, as the gas ESP customer mix changes, their pro rata share will change and the amount of capacity assigned for the month on each path may change commensurately.
A gas ESP that holds rights on these paths may assign these rights. However, these rights are constrained by the one-month term of capacity assignments, the one-year pro-rata term, and the recall of capacity in the event customers return to PG&E from a gas ESP. Under PG&E's proposal, gas ESPs would have to agree not to enter into capacity releases or assignments with third parties that would restrict their ability to honor these recall-return requirements, and agree to hold PG&E harmless for any inability to fulfill these requirements.
3. Core Firm Storage Proposal
PG&E's third proposal is to continue offering storage held for core customers to gas ESPs on an annual basis. However, PG&E proposes a change in the way rejected capacity is treated, and the manner in which adjustments are made during the storage year. Under PG&E's proposal, the storage unbundling established in the Comprehensive Gas OII Settlement in D.00-05-049 will continue with the following changes:
· The elections for Core Firm Storage will be made as specified for transportation capacity. That is, a gas ESP will determine, prior to each April through March year, the percentage of its pro rata share of Core Firm Storage rights that it wishes to accept. That percentage of the pro rata share will be in effect for the gas ESP for the remainder of the storage year. A monthly adjustment structure will replace the generally optional mid-year and winter adjustments. Under this structure, if the gas ESPs' pro rata share of inventory changes by more than 10,000 therms, the supplier will have the opportunity to adjust its assignment. If the share changes by more than 100,000 therms, the adjustment will be mandatory. PG&E contends that the change to monthly adjustments will simplify administration of this program.
· The pro rata share for each CPG will be based upon peak January loads, instead of historical winter load, to be consistent with the core Winter Firm Capacity Requirement specified in Chapter 4 of Exhibit 1.
· The minimum monthly amount of gas that each CPG must hold in accepted Core Firm Storage will also be adjusted to account for the two minimum capacity steps of the Winter Firm Capacity Requirement. Minimum inventory limits will be enforced by monthly balancing adjustments during injection months, and by withdrawal limits during withdrawal months.
· All rejected capacity will become part of PG&E's Core Procurement Department portfolio and be part of the CPIM benchmark.
· Schedule G-CFS, Core Firm Storage, will apply to PG&E's Core Procurement Department and gas ESPs as discussed in Chapter 6 of Exhibit 1. Schedule G-CFS rates are discussed in Chapter 14 of Exhibit 1.
4. Core Aggregation Growth Proposal
PG&E's fourth proposal is not to allow gas ESPs to reject assignments of core transmission and storage capacity once the CAT program grows to serve ten percent of peak core loads. That is, once the CAT program serves ten percent or more of peak core loads, the storage and transportation options will become mandatory. PG&E contends that such a proposal is needed to limit the potential subsidy of the CAT program by the remaining 90% of bundled customers in the event gas ESPs reject large amounts of storage or transportation, and to support system reliability. PG&E proposes that this assignment of a full share of core transportation and storage resources begin in April, one year after the CAT program has achieved the ten percent level.
5. Information Proposal
SPURR/ABAG recommend that PG&E be required to publish additional information regarding the method and principles that pertain to computation of its monthly gas prices for core customers. SPURR/ABAG contend that PG&E's core customers lack sufficient information on how PG&E purchases its core gas supplies, and the pricing for such gas. In order to core customers to be aware of their gas supply choices, the customers must be able to understand how PG&E's gas is priced.
B. Position of the Parties
1. SPURR/ABAG
SPURR/ABAG act as agents for, and represent the interests of school districts and local governmental entities that purchase gas through the core aggregation program. The core aggregation program is an integral part of the Gas Accord structure.
SPURR/ABAG support PG&E's proposal to include Canadian capacity in the transportation options available to gas ESPs. However, they question the requirements that gas ESPs be required to accept an assignment of PG&E's reserved core capacity for one year, rather than for one month, and that a gas ESP must accept or reject all segments of a pipeline path.
SPURR/ABAG contend that PG&E's proposed change to require a core aggregation customer to make a one-year commitment, rather than a one-month commitment, in order to obtain a proportionate share of the pipeline capacity that PG&E has reserved for all of its core customers, would restrict the pipeline capacity options that are available to core aggregation customers. Under the current Gas Accord rules, a core aggregation customer, or its core aggregator, exercises a monthly option to accept all, some, or none of the proportionate share of the reserved core capacity on each pipeline segment that is held by PG&E for its core customers.
SPURR/ABAG assert that the monthly capacity option is a valuable benefit because it provides core aggregation customers with the flexibility to switch their purchases of capacity, and gas supplies, between and among the supply basins that provide the most economic alternatives. This allows core aggregators to minimize the delivered cost of gas for their core customers, while providing supply reliability. SPURR/ABAG point out that PG&E exercises the same flexibility with its capacity rights on pipelines delivering gas from Canada and the Southwest United States.101 Also, core aggregation loads increase and decline over the course of a year. The monthly option can better accommodate these monthly fluctuations. An annual, rather than a monthly obligation, would restrict the core aggregator's ability to release temporarily unneeded capacity, and diminish the supply alternatives available to core aggregation customers.
SPURR/ABAG also point out that if the one-year capacity assignment is adopted, and the core aggregator's load declines during the one-year, a proportionate share of the core aggregator's capacity would have to be returned to PG&E so it can serve its returning core customer load. Essentially, the one-year assignment would be recallable, and that would make it very difficult for a core aggregator to release unutilized capacity to other parties and reduce the value of that capacity.
SPURR/ABAG are also opposed to PG&E's proposal that a core aggregation customer seeking to obtain a proportionate share of the core capacity on one leg of a pipeline path, must also obtain a proportionate share of the core capacity on every other leg of that pipeline path, (i.e., the core transport path concept). SPURR/ABAG assert that this amounts to a rebundling of interstate and intrastate capacity rights for core aggregation customers, and is an unlawful tying arrangement and should be rejected.
Under the current Gas Accord rules, a core aggregation customer may elect to accept an assignment of PG&E's capacity on any one of the interstate and/or backbone pipelines on which PG&E reserves capacity for its core customers. A tying arrangement would remove the flexibility that core aggregators now enjoy to purchase gas either in the supply basin, at the California border, or at the PG&E citygate. SPURR/ABAG contend that the tying arrangement would violate FERC's capacity release rules, which provides that a holder of firm interstate capacity may not time the release of that capacity to any requirement or condition that is unrelated to the interstate capacity. PG&E's proposal to link the assignment of PG&E's interstate capacity with the assignment of PG&E's backbone capacity would accomplish exactly what the FERC rules prohibit. The Commission should reject PG&E's attempt to rebundle the intrastate (backbone) and interstate capacity options that are available to core aggregation customers.
A core aggregation customer's ability to acquire capacity on one pipeline or another, or on one path or another, is a matter of choice and flexibility. The core aggregation customer, like any noncore customer, should have the option to purchase its gas in the supply basin, at the US-Canadian border, at the California border, or at the PG&E citygate. This gas supply flexibility is at the heart of the Gas Accord. Under PG&E's proposal, a core aggregation customer would be forced to purchase its gas supplies either at the PG&E citygate (declining any assignment of capacity) or in the supply basin (accepting an assignment of capacity on the entire pipeline path). If PG&E's proposal is adopted, it would severely limit the flexibility that core aggregation customers currently enjoy under the Gas Accord.
Although PG&E asserts that the bundled capacity assignment would reduce gaming by core aggregators, and reduce costs to PG&E's core bundled customers, SPURR/ABAG assert that the acquisition of PG&E's reserved core capacity by core aggregation customers is not gaming. SPURR/ABAG assert that PG&E presented no evidence to demonstrate the need for a change in the core aggregation rules, and there is no evidence to suggest that the current unbundled capacity assignment procedure has resulted in gaming by core aggregators. Also, contrary to PG&E's assertion, there is no evidence that the unbundling of core aggregators' pipeline capacity has imposed additional costs upon core bundled sales customers.
SPURR/ABAG Power does not object to the other core aggregation proposals of PG&E. They have no objection to PG&E's proposal to make core aggregation customers subject to the same reliability standards that are imposed upon PG&E's bundled core procurement customers; the proposal for minimum storage inventory limits for all core procurement groups, including core aggregation groups; and PG&E's proposal to impose a mandatory assignment of transportation capacity and storage once the core aggregation program exceeds ten percent of the core market.
TURN expressed the view that the Commission should not address in this proceeding PG&E's proposal to offer an assignment of a pro rata share of its reserved core capacity on the ANG and NOVA pipelines to gas ESPs. SPURR/ABAG contend that this issue is ripe for consideration in this proposal. In TURN's response to the petition for modification of D.97-12-032 that was filed by SPURR/ABAG, TURN stated that to the extent that SPURR/ABAG believe that changes should be made to the capacity assignment rules as they apply to the core aggregation program, those changes should only be considered for the period following the expiration of the Gas Accord, which is what PG&E has done.
SPURR/ABAG in Exhibit 36 explained the mismatch between the firm capacity on ANG and NOVA and on the PGT pipelines. PG&E currently holds less firm capacity rights on the ANG and NOVA pipelines (591 and 593 MDth/day, respectively) than it holds on the PGT pipeline (610 MDth/d). Under the terms of the Gas Accord, the way this mismatch is treated is that PG&E reserves all of the ANG and NOVA capacity for its bundled core sales customers, and core aggregation customers do not receive an optional assignment of any of PG&E's ANG and NOVA capacity.
The Gas Accord provides that core aggregation customers will only receive an optional assignment of a proportionate share of PG&E's ANG and NOVA capacity when the amount of ANG and NOVA capacity that is available to PG&E's core bundled sales customers matches the amount of PG&T capacity that is available to PG&E's core bundled sales customers. That is, the core aggregation program must grow to the point at which core aggregation customer have the option to subscribe to more than 20 MDth/day of PG&E's reserved core PGT capacity, before the mismatch is eliminated, and core aggregation customers may receive a proportionate share of ANG and NOVA capacity.
Under the current terms of the Gas Accord, the core aggregation program must grow to approximately 7.6% of PG&E's core load before PG&E will make ANG and NOVA capacity available for assignment to core aggregation customers. As PG&E noted in Exhibit 1 at 16-3, the core aggregation program is only approximately 4% of PG&E's core load.
SPURR/ABAG supports PG&E's proposal to offer a pro rata share of PG&E's reserved ANG and NOVA capacity to core aggregation customers, but is not in favor of the bundling of the entire path. SPURR/ABAG contend that PG&E acquired and holds its ANG and NOVA capacity for all core customers, including both core bundled sales customers and core aggregation customers. Core aggregation customers receive an optional assignment of a proportionate share of capacity on every other pipeline (backbone and interstate) on which PG&E reserves capacity for the core market. SPURR/ABAG contend that core aggregation customers should have access to a proportionate share of the transportation capacity on the same pipelines over which PG&E serves its core bundled sales market. Core aggregation customers should not be denied access to PG&E's ANG and NOVA capacity simply because they purchase their gas supplies from a third party.
SPURR/ABAG assert that the mismatch of capacity is not related to the core aggregation program. As long as a core aggregation customer pays the full as-billed rate for the capacity, SPURR/ABAG contend that a core aggregation customer should be granted an optional assignment of an amount up to a proportionate share of PG&E's reserved ANG and NOVA capacity.
SPURR/ABAG also support PG&E's proposal to make available to core aggregation customers, a proportionate share of PG&E's newly acquired El Paso pipeline capacity (204 MDth/day), and a proportionate share of PG&E's reserved Transwestern pipeline capacity (150 MDth/d). PG&E has proposed in R.02-06-041 that this capacity should be reserved by PG&E for its core market. In order to compete with PG&E for sales of gas to core customers, core aggregators must have access to the same interstate and intrastate capacity to which PG&E's core procurement group has access. If the Commission decides in R.02-06-041 that this interstate capacity should be allocated to PG&E's core procurement customers, core aggregators should enjoy equivalent access to this capacity.
SPURR/ABAG also sponsored testimony with respect to the competitiveness of the gas supply options that are available to PG&E's core gas customers. Among PG&E's core customers, only four percent currently select core aggregation service. SPURR/ABAG contend that this low level of core customer participation in the core aggregation program strongly suggests that core customers are not fully aware of available competitive supply options.
SPURR/ABAG Power proposes that PG&E be required to explain how it prices its gas sales to core customers. In addition, PG&E must be required to explain the principles that underlie its gas price calculation. SPURR/ABAG Power contend that without a clear explanation, the absence of a transparent core gas pricing mechanism inhibits the development of a competitive gas supply market.
PG&E stated in its opening brief at page 107 that it already provides extensive information about its core price. SPURR/ABAG contend that although PG&E provides the math to calculate the core gas price, it does not explain to its core customers the manner in which PG&E purchases gas (i.e., a combination of long-term and short-term contracts), the manner by which PG&E uses storage for its core supply portfolio, or the method that PG&E uses to defer certain core procurement costs from one month to the next. In order for core customers to understand their gas purchase options, PG&E must provide a clear explanation of how PG&E purchases and prices its core portfolio gas on a monthly basis.
2. TURN
PG&E proposes to assign a pro rata share of its core Canadian pipeline capacity on the ANG and NOVA systems to gas ESPs. TURN points out that the Commission recently rejected a similar proposal in a petition for modification of D.97-12-032, which was denied on January 23, 2002. TURN asserts that there is no basis for inserting this issue into this proceeding.
3. PG&E
PG&E contends that the basic structure and rules for core aggregation have worked well for core customers under the Gas Accord structure. A functioning system is in place in which all core customers have a choice of supplier, which allows them to choose a gas supplier which best fits their needs.
PG&E contends that the changes to the CAT program will support system reliability, improve gas basin access for gas ESPs, and improve the allocation of cost responsibility for the core gas choice program. PG&E contends that its proposal strikes a reasonable balance between the desire of gas ESPs to have access to Canadian capacity, and concerns that the current flexibility in capacity allocation provides an excessive subsidy to gas ESPs and/or their customers.
SPURR/ABAG oppose PG&E's proposal that a core aggregation customer must accept the assignment of capacity on an entire path on a bundled basis, rather than accepting a separate assignment for each pipeline segment. SPURR contends that this amounts to an unreasonable tying arrangement in violation of the FERC capacity release rules. PG&E asserts that there is nothing unreasonable or unlawful about this proposal.
PG&E contends that the sole issue involves the core aggregation program and the Commission's rules under which PG&E will be permitted to assign some of its capacity holdings to gas ESPs. As such, the Commission has broad authority to administer and establish rules for the core aggregation program. Limiting the assignment of capacity to an entire path reduces gaming by gas ESPs, and gives the ESPs the option to better align their capacity holdings with the capacity held by PG&E on behalf of other core customers, simplifies the capacity assignment process, and reduces administrative inefficiencies.
PG&E also asserts that its proposal is not an unlawful tying arrangement. PG&E's Core Procurement Department, is one of many holders of capacity on interstate pipelines, and does not possess market power in the tying product. Core aggregators are free to purchase pipeline capacity, whether bundled or unbundled, from other firm capacity holders and marketers of capacity. Even if antitrust principles were implicated, PG&E's proposal merely involves the rules for a regulatory program that is under the Commission's control. So long as the program is based on a clearly articulated state policy and actively supervised by the state, it is immune from antitrust claims under the state action immunity doctrine.
SPURR/ABAG also argue that PG&E's annual assignment proposal places an unreasonable burden on ESP customers. PG&E points out that SPURR/ABAG fail to acknowledge that under PG&E's proposal, ESPs have the option, not the obligation, to take the capacity on an annual basis. Under PG&E's proposal, ESPs still would have an advantage over bundled core customers, since bundled customers don't have the option to accept or reject the costs of the transportation.
TURN contends that the Commission recently rejected making Canadian capacity available to gas ESPs, and that this issue should not be included in this proceeding. PG&E disagrees, and asserts that this is the correct forum in which to address this issue, and is distinguishable from the issue that was addressed in D.97-12-032.
SPURR/ABAG recommend that PG&E be required to publish additional information regarding the method and principles that pertain to computation of its monthly gas prices for core customers. PG&E contends that it already provides extensive information about its gas prices, including detailed workpapers that accompany each month's core gas rate filings, and that no additional information is needed. To the extent the information published by PG&E can be improved to further better service to its core customers, PG&E is willing to work with gas ESPs, and proposes to discuss that in the Core Procurement Advisory Group (CPAG) forum.
C. Discussion
1. Winter Firm Capacity Requirement Proposal
PG&E proposes that gas ESPs be subject to the same Winter Firm Capacity Requirement that is proposed for PG&E's Core Procurement Department. Such a requirement would mean that beginning in the winter of 2004-2005, all CPGs must hold sufficient firm intrastate pipeline capacity and storage capacity to meet its core demand for a 1-in-10 year cold temperature event. In order to meet this requirement PG&E proposes that all gas ESPs be given an option to take a pro rata share of PG&E's core holdings.
As discussed earlier, we are not adopting, at this time, PG&E's proposals for a Winter Reliability Standard and Winter Firm Capacity Requirement. Since the Winter Firm Capacity Requirement is not adopted, PG&E's proposal that gas ESPs be required to meet this requirement is moot.
As discussed below, gas ESPs will continue to have the right to obtain pro rata shares of transportation and storage capacity in 2004 and 2005.
2. Transportation Capacity Proposal
PG&E's second proposal is to offer to each gas ESP an annual option to a pro rata share of each of the four core transport paths.
Under the Gas Accord structure, gas ESPs have the option to accept or reject on a monthly basis a portion of PG&E's interstate and intrastate capacity holdings that serve core customers. (73 CPUC2d 829-830.) At the present time, these rights are offered on GTN, Redwood, and Baja. The gas ESPs' right to a proportionate share of the core rights on the ANG and NOVA pipelines are not triggered until certain conditions have been met. (73 CPUC2d 829.)
PG&E's proposal would change the current method in which gas ESPs can obtain a proportionate share of PG&E's Core Procurement Department's core transmission capacity. PG&E's proposal would change the monthly option to a yearly option. The proposal would also change which pipeline segments the gas ESPs could accept or reject, while broadening which pipeline paths would be made available to gas ESPs.
SPURR/ABAG is concerned that these changes will reduce the flexibility and choices that gas ESPs have. Instead of being allowed to decide whether to take a share of core capacity on a monthly basis, they will have to make an annual election for four set core transport paths.
One of the key features of the Gas Accord structure was to unbundle PG&E's gas transmission system into separate services. (73 CPUC2d 769, 771, 797.) PG&E's core transport paths, instead of unbundling the various ways in which gas ESPs can obtain gas, would require them to take service over the entire transport path. Instead of improving "flexibility and customer choice,"102 the proposal that gas ESPs be required to take transmission service from the gas producing basins to the citygate over a fixed path restricts the manner in which gas ESPs can procure their gas supplies. Although the core transport path may make the administration of capacity assignments easier, and match upstream and downstream capacity, these administrative burdens are outweighed by the benefits of allowing gas ESPs the flexibility to decide where to purchase their gas, and how to transport it.
PG&E asserts that allowing gas ESPs to take or reject transmission service over pipeline segments has led to gaming. However, PG&E has not demonstrated that the monthly option of allowing gas ESPs to decide which pipeline segment to take service on has resulted in adverse effects.
An annual election, as opposed to the current monthly election, also reduces the operating flexibility that gas ESPs have because it requires them to make an annual commitment for capacity. Although such a change could reduce the monthly excess capacity that may result if gas ESPs decide to reject capacity, the monthly option allows the gas ESPs more flexibility to meet their customers' needs.
Instead of expanding the choices available to gas ESPs, the annual election and core transport paths restrict the operational abilities of the gas ESPs. PG&E's transportation capacity proposal for gas ESPs is rejected.103
The rejection of PG&E's proposal leaves open the question of which paths gas ESPs can elect to have a proportionate share. The GTN, Redwood and Baja paths, still have reserved firm core capacity.
In Phase II of the El Paso proceeding in R.02-06-041, PG&E has proposed that its El Paso capacity serve core customers. PG&E proposes that to the extent that El Paso capacity is included in the CPIM, this capacity be made available to the gas ESPs. As referenced at pages 16-8 and 16-11 of Exhibit 1, "PG&E's existing Transwestern holdings" may also be available to the core.
The Canadian paths of NOVA and ANG are currently not offered to gas ESPs. Although PG&E's proposal would have made these two paths available as part of the Canadian core transport path, we have rejected PG&E's proposal. TURN points out that in A.96-09-028, the Commission rejected a petition to modify D.97-12-032 to make the NOVA and ANG paths available to gas ESPs. This occurred on January 23, 2002, when the Commission rejected a draft decision which would have granted the gas ESPs access to these pipelines. (See 1/23/02 Commission Agenda Results.) The Gas Accord also restricted gas ESPs from obtaining a proportionate share of NOVA and ANG until certain conditions were met.
We will continue to allow gas ESPs serving core customers to obtain a proportionate share of core holdings on the GTN, Redwood, and Baja pipelines. In the event the El Paso capacity, and possibly Transwestern capacity, is assigned to the core, and is included as part of PG&E's CPIM, we shall permit gas ESPs to obtain a proportionate share of those core holdings. Based on the Commission's January 23, 2002 action, and the Gas Accord's precondition to NOVA and ANG capacity, we will not allow gas ESPs to obtain a proportionate share of those two pipelines at this time.
3. Core Firm Storage Proposal
PG&E proposes to continue offering gas ESPs storage rights. Under the Gas Accord structure, as changed by the Comprehensive Gas OII Settlement Agreement, gas ESPs are offered a pro rata share of the total core firm storage rights. (D.00-05-049, Att. A, p. 15; See 73 CPUC2d 830.)
As described earlier, PG&E proposes to make five changes to the core storage program as set forth in Attachment A of D.00-05-049. Two of the changes are related to the Winter Firm Capacity Requirement, and how storage allocations are calculated, and the minimum monthly amount of gas that must be held in storage. The other changes affect the adjustment of inventory process, how rejected capacity is to be treated (discussed earlier), and PG&E's proposed Schedule G-CFS (discussed earlier).
SPURR/ABAG does not oppose PG&E's proposed changes.
We will permit PG&E to change the adjustment of inventory process. The change to the treatment of rejected capacity and Schedule CFS have been discussed earlier. Since we do not adopt PG&E's Winter Reliability Standard and Winter Firm Capacity Requirement, the two changes related to the Winter Firm Capacity Requirement shall not be permitted. PG&E's core firm storage proposal shall be adopted as changed by this discussion.
For 2004 and 2005, the core firm storage provisions shall be based on D.00-05-049 and the adopted core firm storage changes.
4. Core Aggregation Growth Proposal
PG&E's proposed core aggregation growth proposal is designed to address the issue of cost recovery of core transmission and storage holdings. Presently, gas ESPs serving core customers can reject or accept a pro rata share of these facilities. If gas ESPs are allowed to reject these facilities as they serve more customers, remaining customers will bear these costs.
SPURR/ABAG do not oppose this proposal. We will adopt PG&E's proposal to make it mandatory for gas ESPs serving core customers to accept a pro rata share of core transmission and storage capacity once the CAT program serves ten percent of peak core loads.
5. Information Proposal
SPURR/ABAG propose that PG&E be required to publish information about how PG&E computes its monthly gas price for core customers, and the principles behind the calculation. PG&E opposes the proposal because it already provides that kind of information in its monthly core gas filings, on customers' bills, and on its website. PG&E has also indicated a willingness to discuss this issue with the Core Procurement Advisory Group, of which SPURR is a member.
We do not adopt the proposal of SPURR/ABAG for PG&E to provide information regarding its monthly gas price. That kind of information already appears on customers' bills, and the detailed backup information is provided for in monthly filings and workpapers.
