2. Description of Transaction

Pacific Pipeline is a public utility subject to the jurisdiction of this Commission under Pub. Util. Code § 216. Pacific Energy Group LLC (Pacific Energy) is a newly formed Delaware limited liability company. The parties seek an order approving a change of control of Pacific Pipeline to Pacific Energy.

Specifically, Pacific Pipeline's immediate parent, PPS Holding Company (PPS Holding), a Delaware company, proposes to transfer its 100% membership interest in Pacific Pipeline to Pacific Energy. Pacific Energy is also a wholly- owned subsidiary of PPS Holding. Consequently, Pacific Pipeline would become a wholly-owned subsidiary of Pacific Energy, which in turn is wholly owned by PPS Holding. Applicants state that the primary purpose of the change is to consolidate PPS Holding's western United States energy activities for financial reporting purposes by utilizing a separate holding company, Pacific Energy.

Applicants state that the proposed change in control is largely administrative and will have no substantive impact on Pacific Pipeline's operations or on the general public.