2. Procedural Background
Pacific Gas and Electric Company (PG&E) requests that the Commission grant its application concerning the revenue requirement, cost allocation, and rate design of its gas transmission and storage (GT&S) services for the four-year period from January 1, 2011 through December 31, 2014. Timely protests and a response to PG&E's application were filed by various parties, to which PG&E filed a reply.
A prehearing conference (PHC) was held on December 2, 2009, and a scoping memo and ruling (scoping ruling) was issued on December 18, 2009. In that scoping ruling, evidentiary hearings were originally scheduled for May 2010.2
The scoping ruling also scheduled public participation hearings in conjunction with PG&E's General Rate Case (GRC) proceeding in Application (A.) 09-12-020.3 Eighteen joint public participation hearings were held at eleven different locations in PG&E's service territory during May and June 2010. A summary of the public comments applicable to this proceeding is set forth in section 3.2. of this decision.
In the days following the PHC, PG&E and the parties to the proceeding began settlement discussions. A formal settlement conference was noticed for and held on July 29, 2010. On August 20, 2010, PG&E, joined by the settlement parties, filed a "Joint Motion of Settlement Parties for Approval of `Gas Accord V' Settlement" (Joint Motion).4 The proposed "Gas Accord V Settlement Agreement" (Gas Accord V Settlement or "settlement"), dated August 20, 2010, was attached to the Joint Motion.5
In accordance with the procedure set forth in the August 25, 2010 Administrative Law Judge's (ALJ) ruling, as clarified by the September 15, 2010 ruling, parties were allowed to contest the Joint Motion by serving testimony in opposition to the Joint Motion, or by filing comments on the Joint Motion.
San Diego Gas & Electric Company (SDG&E) and Southern California Gas Company (SoCalGas), who are not signatories to the Gas Accord V Settlement, filed their comments in opposition to the Joint Motion on September 20, 2010. SDG&E and SoCalGas also attached their prepared testimony which addressed their contested issues.
An evidentiary hearing on the issues raised by SDG&E and SoCalGas was held on October 25 and 26, 2010. Opening briefs were filed on November 10, 2010, and reply briefs were filed on November 19, 2010.
Following the September 9, 2010 natural gas pipeline explosion and fire in San Bruno (San Bruno explosion), a ruling was issued on September 15, 2010 which asked the parties to comment on whether the Gas Accord V Settlement was adequate in light of the pipeline safety concerns raised by the San Bruno explosion. On September 20, 2010, PG&E filed comments in response to the ruling, and the other settlement parties filed a reply to PG&E's response on September 30, 2010. On October 15, 2010, a revised scoping ruling was issued, which among other things, added a new safety phase to this proceeding to address the safety concerns raised by the San Bruno explosion. After receiving comments to a series of questions posed in the revised scoping ruling, a ruling was issued on February 3, 2011. That ruling stated, among other things, that a reporting requirement might be imposed in this decision. The issues covered by this phase of the proceeding were submitted following the February 3, 2011 ruling.
As explained later in this decision, the Commission has taken a number of other steps with regard to pipeline safety, and has formed the Independent Review Panel (IRP) to investigate the San Bruno explosion, including an assessment of the events and their root causes, and to make appropriate recommendations. In addition, the National Transportation Safety Board (NTSB) is conducting its own investigation into the cause of the San Bruno explosion, and recently held public hearings on March 1-3, 2011.
As a result of the extensions that were granted in this proceeding, PG&E filed a motion on October 8, 2010 requesting an order allowing the Gas Accord V Settlement revenue requirements and rates to go into effect on January 1, 2011, or to make the revenue requirements resulting from a subsequent final decision in this proceeding to be effective as of January 1, 2011. PG&E filed the motion to allow the settlement parties to realize the benefits of what they negotiated in the Gas Accord V Settlement, in the event the Commission grants the August 20, 2010 Joint Motion. In D.10-12-037, the Commission granted PG&E's request to make the revenue requirements and related elements resulting from a decision on the Joint Motion and the contested issues, to become effective as of January 1, 2011.
2 Through other motions and rulings, the evidentiary hearings were reset three different times, and evidentiary hearings were held on October 25-26, 2010.
3 A.09-12-020 addressed PG&E's revenue requirement for the costs of providing its electric generation and electric distribution services, and its natural gas distribution service.
4 The settlement parties are as follows: PG&E; ABAG Publicly Owned Energy Resources (ABAG Power); California Cogeneration Council; California Manufacturers & Technology Association; Calpine Corporation; Canadian Association of Petroleum Producers; City of Palo Alto; Commercial Energy; Division of Ratepayer Advocates (DRA); Dynegy Moss Landing, LLC and Dynegy Morro Bay, LLC; El Paso Corporation; Gas Transmission Northwest Corporation; Gill Ranch Storage, LLC; Indicated Producers; Lodi Gas Storage LLC; Mirant California, LLC and Mirant Delta, LLC; Northern California Generation Coalition; Sacramento Municipal Utility District; School Project for Utility Rate Reduction; Southern California Generation Coalition; Spark Energy; The Utility Reform Network (TURN); Tiger Natural Gas Inc.; Vista Energy Marketing L.P.; and Wild Goose Storage, LLC.
5 The term "Gas Accord" refers to the establishment and settlement of the gas market regulatory structure for PG&E's GT&S facilities and services that started with Decision (D.) 97-08-055 [73 CPUC2d 754], and except for 2004 (D.03-12-061), was followed by subsequent settlements in D.02-08-070, D.04-12-50, and D.07-09-045. This gas market structure is characterized by the unbundled GT&S service offerings for non-core customers.
