IV. Comments and Replies on Draft Decision
The draft decision of ALJ Sullivan in this matter was mailed to the parties in accordance with Pub. Util. Code § 311(g)(1) and Rule 77.7 of the Rules of Practice and Procedure.
1. On June 1, 2001, ABAG POWER and SPURR jointly filed a petition to modify D.97-12-032.
2. The Petition could not have been filed within a year of the effective date of D.97-12-032 because it was impossible to anticipate the market developments that have necessitated this filing.
3. The Commission has previously developed capacity assignment rules that apply to the core aggregation program on the PG&E system.
4. The core aggregation program expands the choices available to core gas customers on the PG&E system.
5. The Commission has supported expansion of customer choice in previous Commission decisions.
6. Permitting core customers a choice of gas suppliers enables them to shop for better prices and provides incentives for the core utility to match market prices. Thus, customer choice benefits all core customers.
7. A diversity of gas suppliers and gas contracts acts as a hedge of volatile energy markets.
8. California natural gas markets have exhibited high volatility over the last year.
9. In the last year, highly volatile gas transportation costs on the ANG and NOVA pipelines have at times dwarfed the price of gas.
10. Over the period of the Gas Accord, the market value of the ANG and NOVA pipeline capacity has exceeded the as-billed cost. Thus, there are no net "hedge" costs that bundled core customers have borne for reserving capacity on the ANG and NOVA pipelines.
11. ABAG POWER and SPURR are organized as buying cooperatives that pass cost savings on to their members.
12. If a gas aggregator fails to pass on transportation savings to its customers, the customers can elect to shift their service to the core utility. This provides incentives for core aggregators to pass on transportation savings to their customers.
13. Permitting core aggregators to reserve transport capacity on the Canadian NOVA and ANG systems would have led to an increase to other core customers of approximately 1 percent last year. At current market conditions, other core customers would see no price change.
14. Permitting core aggregators to reserve transport capacity on the Canadian NOVA and ANG systems will help stabilize gas provisioning by core aggregators and reduce the return of customers to the bundled core.
15. If customers elect to return to the bundled core, the core utility must provide service to them and acquire the transmission capacity needed.
16. Core aggregators did not previously have an opportunity to reserve transmission capacity on the NOVA and ANG systems.
17. Adopting restrictions on eligibility for the assignment of capacity on the NOVA and ANG pipelines is necessary to stabilize the current core aggregation market without subsidizing its expansion.
18. Limiting the assignment of PG&E's ANG and NOVA capacity rights to core aggregators to no more than the amount of firm PGT capacity that a core aggregator has obtained from PGT over the twelve months ending June 1, 2001 will link the assignment of transmission capacity to current participation in Canadian gas markets.
19. Limiting the assignment of capacity on the ANG and NOVA pipelines to current core aggregators will prevent the expansion of the core aggregation program by those seeking to arbitrage transmission costs.
20. Limiting the assignment of PG&E's ANG and NOVA capacity to a one-time allocation that the aggregator will hold until the end of the Gas Accord serves to discourage those seeking to arbitrage "as-billed" and market transmission prices.
21. Requiring those who elect an assignment of ANG and NOVA capacity to forfeit their existing option to choose PGT capacity on a monthly basis discourages the arbitrage of transmission prices.
1. Because the market developments that necessitated the Petition could not have been presented within a year of the effective date of D.97-12-032, the Petition qualifies for Commission consideration consistent with Rule 47 (d) of the Commission's Rules of Practice and Procedure.
2. Stabilizing the core aggregation market is consistent with §§ 328 - 328.2 of the Public Utilities Code.
3. The assignment of capacity on ANG and NOVA to core aggregators will not result in unreasonable price increases to unbundled core customers.
4. Restricting the assignment of capacity on ANG and NOVA to current core aggregators is reasonable.
5. Limiting the assignment of capacity on ANG and NOVA to a one-time allocation that will hold until the end of the Gas Accord is reasonable.
6. Requiring those who elect an assignment of ANG and NOVA capacity to forfeit their existing option to choose PGT capacity on a monthly basis is reasonable.
7. The assignment of capacity on ANG and NOVA to core aggregators, subject to the restrictions enumerated above, is reasonable and in the public interest.
8. This proceeding should be closed.
IT IS ORDERED that:
1. We grant the Petition to the extent described in ordering
paragraphs 2 and 3.
2. We modify Decision (D.) 97-12-032 by replacing the language at 77 CPUC 2d 101 (item 3) with the following:
Through the remainder of the Gas Accord term, a core aggregator that takes an assignment of PG&E's firm PGT capacity at the full (core mitigated) as-billed rate may also elect to take an assignment of a proportionate share of PG&E's firm upstream capacity at the full as-billed rate.
For the duration of the Gas Accord, a core aggregator shall be limited to a proportionate assignment of upstream Canadian capacity based on the average size of the core aggregator's load for the year ending June 1, 2001 (the date the Petition was filed) and in no event should it exceed the average amount of firm PGT capacity that a core aggregator has obtained by assignment from PGT over the year ending June 1, 2001.
The assignment of PG&E's ANG and NOVA capacity will be a one-time allocation of capacity that the aggregator will hold until the end of the Gas Accord. There will be no "monthly option" on the ANG and NOVA capacity. Those core aggregators obtaining an assignment of ANG and NOVA capacity must forfeit their existing option to choose PGT capacity on a monthly basis.
Finally, There shall be no allocation of capacity to new core aggregators.
3. We further order the wording in ordering paragraph number shall replace language that appears in the Gas Accord settlement (D.97-08-055, Appendix B at 73 CPUC 2d 829 (item F.1.b.ii)).
4. This proceeding is closed.
This order is effective today.
Dated , at San Francisco, California.
