8. Assignment of Proceeding

Michael R. Peevey is the assigned Commissioner and Hallie Yacknin is the assigned Administrative Law Judge in this proceeding.

Findings of Fact

1. The record does not support the adoption of standards or requirements regarding supply reliability and/or cost guarantees for LNG supply contracts.

2. We cannot find on this record that the gas utilities' entry into long-term LNG supply contracts will increase the likelihood or timeliness of developing the West Coast LNG market.

3. Allowing LNG and domestic supplies to compete head-to-head will best achieve the competitive benefits of bringing LNG supply to the West Coast.

4. Under current gas policy and procedures, the utilities' recovery of gas supply costs is governed by their procurement incentive mechanisms.

Conclusions of Law

1. LNG supply should compete head-to-head with other supply regardless of source.

2. The utilities' procurement and cost recovery related to LNG supply should continue to be governed by the procedures and incentive mechanisms that apply to natural gas procurement generally.

3. The utilities' potential procurement of LNG supply is not a "project" under CEQA.

4. Environmental review under CEQA is not required in this proceeding.

5. This proceeding should be closed.

ORDER

IT IS ORDERED that Rulemaking 07-11-001 is closed.

This order is effective today.

Dated October 16, 2008, at San Francisco, California.

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