DISCUSSION
SoCalGas requests approval of: 1) revisions to the rates applicable to SWG, and 2) an ITCS crediting amendment to the wholesale gas and transportation contract between SoCalGas and SWG. The revised rates are derived from the cost allocations and volumes approved by the Commission for SoCalGas in Decision (D.) 00-04-060. The contract amendment basically provides a means for SWG to obtain and pay for SoCalGas capacity on EPNG's pipeline, when available, at 100% of the as-billed rate charged to SoCalGas by EPNG, and receive a credit for those costs against SWG's ITCS payments.1 SoCalGas' proposal does no harm to any other SoCalGas customer, would result in lower SWG transportation rates, and may result in lower gas costs for SWG's customers in the southern division.
The revised SoCalGas rates applicable to SWG are a reduction from SoCalGas' current SWG transportation rates. The SoCalGas rate reduction will allow SWG to reduce its own transportation rates.
The ITCS crediting mechanism basically provides a means for SWG to obtain and pay for SoCalGas capacity on EPNG's pipeline, when available, and receive a credit for these costs against SWG's Interstate Transition Cost Surcharge payments. The ITCS crediting mechanism could allow SWG to obtain and use available SoCalGas firm EPNG capacity to serve its existing southern division customers, who are predominantly core customers, rather than purchase high-priced border gas. SWG does not currently have firm interstate pipeline capacity to serve its southern division, and is purchasing gas for that division entirely at the southern California border. Prices at the border have been much higher than the cost of southwest basin gas plus interstate transport costs. SWG's ITCS payments would also be reduced.
The ITCS crediting mechanism should not impact the cost borne by other SoCalGas customers since, as SoCalGas states, "SWG will simply receive a credit in the exact amount by which any subscription by SWG to capacity on the system of El Paso Natural Gas Company will reduce Interstate Transition Cost Surcharge amounts generally."
ORA contended that the contract amendment is discriminatory and recommended that SoCalGas file an application requesting an open season. We note that SoCalGas distributed Advice Letter 2951 to 25 public and municipal utilities and public agencies. The Commission noticed Advice Letter 2951 on its calendar and SoCalGas posted the advice letter on its website. We think this is sufficient notice to parties that may be interested in the SWG contract amendment. No customers filed protest. In addition we are sending Resolution G-3305 out for comment. We do not believe that the ITCS crediting mechanism is unduly discriminatory and that SoCalGas should conduct an open season. Further, we believe that the contract amendment as a whole is in the public interest.
1 1. As a practical matter, SWG may get little discount on its interstate transportation costs with the credit against ITCS payments. SoCalGas' ITCS costs are becoming relatively low due to high demand for interstate pipeline capacity.
