7. Interconnection Issues
In order for the Commission to find that the present or future public convenience and necessity requires construction of the project, the Commission should make findings on the manner in which LGS' facilities will initially be connected with PG&E's system, and determine if interconnection can be accomplished without interfering with existing service.
In the Gas Storage Decision, the Commission, among other things, addressed cost responsibility associated with interconnecting third-party storage providers.
"...Utilities should interconnect with independent storage providers as if the latter were consumers of gas. Thus standard interconnection costs will be recovered on a rolled-in basis. Special facilities costs will be charged to the storage provider." (48 CPUC2d at 127; see also Wild Goose Decision, slip op. at 11.)16
LGS and PG&E have agreed to the interconnection principles attached hereto as Attachment E. The interconnection principles (a) list the interconnection facilities to be installed and owned by PG&E at each of the two interconnection points, and (b) set forth who will pay for the facilities.
This interconnection agreement is analogous in scope and depth (although not in content) to an earlier agreement between PG&E and another third-party storage provider, Wild Goose, which agreement the Commission approved in the Wild Goose Decision, slip op. at p. 25, Ordering Paragraph 7 and Appendix B.
According to this agreement, LGS will pay for all of the facilities, whether they are standard or special facilities. The interconnection costs will be borne by LGS and not by PG&E's ratepayers, and the two parties directly affected by the interconnection principles (i.e. LGS and PG&E) have agreed to them. For these reasons, the interconnection principles are reasonable and we adopt them for this proceeding. As in Wild Goose, the approval of this interconnection agreement is for this facility and this proceeding only, and we do not determine in this proceeding what the cost allocation for future cases should be.
In the Wild Goose Decision, the Commission also required Wild Goose to provide the Director of the Energy Division the final total cost of the interconnection, including the share of the cost paid by each entity, because this information was not set forth in the interconnection principles. (Wild Goose Decision, slip op. at p. 25-26, Ordering Paragraph 7.) Although LGS has provided some estimates of project cost, we require LGS to provide the Energy Division with a supplemental filing similar to the one we required in the Wild Goose Decision.
PG&E also requests that the Commission order LGS and PG&E to enter into an operating and balancing agreement before gas, including cushion gas, flows to the LGS facility on the PG&E system. No party contests this request. We require that LGS and PG&E have an operating and balancing agreement in place before LGS commences its operations, and that LGS file this agreement with the Commission's Energy Division and serve it on all the parties to this proceeding. (See Wild Goose Decision, slip op. at p. 25, Ordering Paragraph 6.)
16 More specifically Rule 2.3 of the Commission's Adopted Rules for Gas Storage Service provides in relevant part:- "The utility shall be responsible for the cost of standard interconnection facilities required, installed, and paid by the utility for transportation customers having similar loads. Responsibility for special facilities in excess of standard interconnection facilities will be assigned by agreement of the Parties or will be submitted to the Commission for resolution. Utility ratepayers shall not be responsible for costs of special facilities. The utility shall not delay installation of interconnection facilities pending resolution of any dispute regarding cost responsibility." (48 CPUC2d at pp. 144-145.)
