5. Discontinuance of EQV Installations

Applicant initiated installation of EQVs on its side of the meter because it believed that such installations might prove to be less expensive than installations on the customer's side of the meter. Applicant now believes that it is not less expensive to do so. Applicant states the following reasons:

· D.00-06-038 placed responsibility on Applicant for compliance with all applicable state and federal codes and regulations when contractors install EQVs on Applicant's facilities.

· New safety regulations effective in 2002.

· Costs to remove and install EQVs have increased since they were first authorized in 1996.

· D.00-06-038 placed responsibility on Applicant for ongoing inspection and maintenance of EQVs installed on its side of the meter.

· The United States Department of Transportation adopted a new Operator Qualification Rule effective October 28, 2002. The effect of the rule is that Applicant's costs will increase because personnel working with EQVs on its facilities will have to have additional training.

Applicant is not willing to assume the increased risk resulting from its responsibility for compliance with all applicable state and federal codes and regulations when contractors install EQVs on its facilities. Applicant states that it is not compensated for the increased risk. Applicant also points out that no other California gas utilities allow installation of EQVs on their pipelines.

Joint Protestants (other than SSS) state that Applicant should not be allowed to discontinue new installations of EQVs on its side of the meter because EQV installation is required in some areas and may be required statewide in the future. In addition, installation on the customer's side of the meter would be more expensive. SSS, however, does not oppose discontinuance.

We conclude that the application should be granted in this respect. Applicant began its EQV program of its own volition. The program was intended to pay for itself. No ratepayers other than program participants were to have borne the cost of the program. We have not required other utilities subject to our jurisdiction to have such a program. Although, as some of the protests note, EQV installation is required in some areas, there is no requirement that EQVs be installed on the utility's side of the meter. Whether the program continues or not, ratepayers will still have the ability to install EQVs. The installation costs will depend on engineering considerations, and may be site specific. As a result, we see no reason to require Applicant to allow additional installations of EQVs on its side of the meter. Therefore, Applicant will be authorized to discontinue allowing new installations on its side of the meter.