VII. Assignment of Proceeding
Loretta M. Lynch is the Assigned Commissioner and Carol Brown is the assigned Administrative Law Judge in this proceeding.
1. D.02-07-037 established two rules: (1) ordering the gas and electric utilities to sign up for a proportionate amount of turned back capacity on the El Paso interstate pipeline; and (2) finding just and reasonable and pre-approving the utilities' subscription to this turned back capacity.
2. The utilities complied with the acquisition rule ordered in D.02-07-037 and acquired the specified amounts/percentages and delivery points of turned-back El Paso capacity (see Attachment A).
3. In conformity with the acquisition rule from D.02-07-037, the utilities should continue to hold the El Paso capacity secured through the end of 2005.
4. Edison should recover the costs of its turned back El Paso capacity from its electric customers through the ERRA.
5. Southwest Gas uses its turned back capacity for its core customers and should recover the costs of this capacity from its core customers.
6. Southwest Gas' request to be exempt from paying any of its share of the ECPT allocation to SoCalGas is not reasonable.
7. SDG&E allocated all of its turned back capacity to its core procurement department and should recover the costs of this capacity from its core procurement customers.
8. PG&E uses its turned back capacity to serve its core market and should recover the costs of this capacity from its core procurement customers.
9. PG&E should renew any short-term contracts for turned back capacity that expire before 2005, for a term that secures the capacity through the end of 2005.
10. All core aggregation customers of PG&E are due a refund for El Paso costs paid by them during the period PG&E reserved and used the El Paso capacity exclusively for the core procurement customers.
11. PG&E should make El Paso and Transwestern capacity available to its core aggregation customers under the rules adopted in the Gas Market Structure Proceeding for PG&E for 2004, A.01-10-011.
12. The Stipulations PG&E entered into with ORA and TURN for all contested issues in Phase II of this proceeding are in the public interest and are adopted because they are a fair compromise and allocate the costs of the El Paso capacity to core procurement customers since the capacity will be used to serve that market.
13. SoCalGas has 406 MMcf/d of previously acquired excess capacity on the El Paso pipeline and acquired 139 MMcf/d of turned back capacity pursuant to the order in D.02-07-037, giving SoCalGas excess capacity on the El Paso line.
14. SoCalGas should recover the stranded costs from its excess turned back capacity from all of its customers on an equal cents per therm basis.
15. SoCalGas may make direct assignments of its turned back capacity, with the customer paying proportionate shares of receipt and delivery points for the full term at the full as-billed rate, and receiving a credit against its share of the ECPT allocation as long as the capacity stays in California.
16. SoCalGas does not need to increase its own core interstate holdings at this time.
17. Resolution G-3334, adopted February 27, 2003, giving the non-core total cost responsibility for SoCalGas' excess pre-existing El Paso capacity remains in full force and effect.
18. It is not necessary at this time to order any adjustments to the utilities' GCIM to account for pre-existing and newly acquired interstate capacity.
19. SoCalGas, SDG&E, Southwest Gas, and Edison are authorized to recover the costs associated with the acquired turned back El Paso capacity as of November 1, 2002, the date they acquired the capacity.
20. PG&E is authorized to recover its costs associated with its acquired turned back El Paso capacity on an ECPT basis in accordance with Commission Resolution G-3339, issued December 19, 2002.
21. PG&E's non-core customers and its core aggregation customers are entitled to a refund for costs they paid for the El Paso turned back capacity and PG&E's core customer should pick up the refunded costs.
22. The utilities may enter into short-term releases of their excess capacity for one year or less, but no long-term releases are justified at this time.
23. The TURN/PG&E stipulation agreeing the commencement date for recovery by PG&E of its Transwestern capacity costs is July 1, 2003, is reasonable and in the public interest.
1. It is reasonable to require the utilities to continue to hold the amount of capacity as ordered in D.02-07-037, by renewing El Paso contracts, unless their renewal requires an extension beyond December 31, 2005, in which case a utility may replace the expiring capacity through other contracts.
2. It is reasonable that the utilities recover the costs of their turned back El Paso capacity from their customers that use the capacity. Therefore, Edison should recover its costs from all its customers, Southwest Gas, SDG&E, and PG&E should recover their costs from their core procurement customers, and SoCalGas should recover its costs from all of its customers on an equal cents per therm basis.
3. Any utility that takes a direct assignment of SoCalGas's excess El Paso capacity should receive a credit against that utility's ECPT allocation to SoCalGas as a wholesale customer as long as the capacity stays in California.
4. Short-term releases of a term of one year or less of excess capacity are reasonable, but it would not comport with D.02-07-037 to allow long-term releases at this time.
5. The record does not support the establishment of a Strategic Gas Storage Reserve in this proceeding.
IT IS ORDERED that:
1. The cost allocation methodologies, and dates for cost recovery, for Pacific Gas and Electric Company (PG&E), Southern California Gas Company (SoCalGas), Southern California Edison Company (Edison), Southwest Gas Company (Southwest Gas), and San Diego Gas & Electric Company (SDG&E) for the costs of the turned back capacity on El Paso Natural Gas Company's (El Paso)
interstate pipeline that the utilities were ordered to procure pursuant to Decision (D.) 02-07-037, as set forth herein, are adopted; Edison is to recover its costs from electric customers through the ERRA as of November 1, 2002; Southwest Gas is to recover its costs from its core procurement customers as of November 1, 2002; SDG&E is to recover its costs from its core procurement customers as of November 1, 2002; SoCalGas is to recover its costs from all of its customers on an equal cents per therm basis (ECPT) as of November 1, 2002; and PG&E is to recover its costs from its core procurement customers.
2. PG&E, Southwest Gas and SDG&E shall begin recovery of their costs with their respective January 2004 monthly core procurement Advice Letter filings. SoCalGas shall recover its El Paso costs through their end of the year rate consolidation Advice Letter. Edison shall submit an Advice Letter within 10 days of the effective date of this decision setting forth a proposed mechanism for recovery of their costs starting January 2004.
3. PG&E shall recover its Transwestern costs beginning July 1, 2003, in accordance with the stipulation entered into with TURN.
4. PG&E, SoCalGas, Southwest Gas, Edison, and SDG&E shall continue to hold the amount of capacity as ordered in D.02-07-037, by renewing El Paso contracts, unless their renewal requires an extension beyond December 31, 2005, in which case a utility may replace the expiring capacity amounts through other contracts.
5. SoCalGas shall grant a credit to wholesale customers that take a direct assignment of SoCalGas' excess El Paso capacity, paying proportionate shares of receipt and delivery points for the full term at the full as-billed rate, for the customer's ECPT allocation to SoCalGas, as long as the capacity stays in California.
6. The utilities may enter into short-term releases of their excess El Paso capacity, but no releases for a term of more than a year are authorized at this time.
7. PG&E shall make El Paso and Transwestern capacity available to its core aggregation customers under the terms and conditions as adopted in the Gas Market Structure Proceeding for PG&E for 2004, A.01-10-011.
8. PG&E shall refund its noncore customers, including core aggregation customers, for costs paid for the El Paso turned back capacity by the noncore customers, and PG&E's core customers should pick up the refunded costs.
9. PG&E shall file an Advice Letter with the Energy Division, within 60 days of the effective date of this decision, setting forth a proposed mechanism for refunding the amounts due plus interest to the non-core and core aggregation costomers and a mechanism for placing the refunded costs into rates for the core customers.
10. Edison, Southwest Gas, SoCalGas, SDG&E, and PG&E shall continue to file quarterly compliance reports with the Energy Division as directed in D.02-07-037.
11. Edison, Southwest Gas, SoCalGas, SDG&E, and PG&E shall file compliance reports with the Energy Division when each utility renews capacity, as ordered in D.02-07-037, and continued through 2005 in this decision.
12. This proceeding is closed.
This order is effective today.
Dated January 22, 2004, at San Francisco, California
MICHAEL R. PEEVEY
President
CARL W. WOOD
LORETTA M. LYNCH
GEOFFREY F. BROWN
SUSAN P. KENNEDY
Commissioners
I will file a concurrence.
/s/ LORETTA M. LYNCH
Commissioner
