IV. Procurement of Additional Capacity

While there is consensus among the parties that all the utilities complied with D.02-07-037 by acquiring specified amounts and delivery points of turned-back El Paso capacity, the parties now want clarification from the Commission whether the utilities have a continuing obligation to secure additional El Paso Capacity. In particular, CMTA, SoCalGas and SDG&E, Southwest, and the Electric Generators advocated that the Commission find no continuing obligation for acquisition of additional El Paso capacity.

The Commission finds that the rule established in D.02-07-037 presumed that California needed to preserve as much capacity as possible on the El Paso line, and it would be contrary to the original rule to not direct the utilities to continue to secure capacity for the short term. The record in this proceeding does not indicate what the long term needs for gas capacity will be for California post-2005. In order to plan for post-2005, the Commission intends to hold workshops on long-term gas capacity needs, then open an Order Instituting Rulemaking (OIR) or an Order Instituting Investigation (OII) on the utilities' long-term procurement needs. The Commission anticipates that an order in that proceeding will supersede D.02-07-037. Until that decision is issued, the gas utilities and Edison are directed to renew any short-term contracts on the El Paso pipeline that expire before 2005, for a term that covers through the end of 2005.

If the renewal of any of the El Paso contracts would require that the contract extend beyond December 31, 2005, the utility is not obligated to renew that contract, but may replace the expiring contract capacity amount from other sources.