9. Assignment of Proceeding

Timothy Alan Simon is the assigned Commissioner and Richard Smith is the assigned ALJ in this proceeding.

Findings of Fact

1. GRS is an Oregon limited liability company formed in 2007 for the purpose of developing, owning, and operating the Project.

2. GRS is qualified to do business in California, and presently is a wholly owned subsidiary of NW Natural.

3. GRS holds a CPCN to construct and operate the Project to provide natural gas storage services within California at market-based rates.

4. NW Natural is an Oregon corporation engaged in the business of purchasing, selling, storing, transporting, and distributing natural gas to more than 652,000 customers in Oregon and southwest Washington.

5. NW Natural is not authorized to and does not provide natural gas local distribution, storage, transmission, or any other services in California.

6. NW Natural formed NW Natural Energy and NW Natural Gas Storage on May 26, 2009 and July 31, 2009, respectively, to segregate and account for NW Natural's regulated core gas distribution business, its regulated gas storage business, and its other investments and business activities, including NW Natural's wholly owned subsidiary NNG Financial Corporation and its equity investment in the Palomar Pipeline.

7. NW Natural Energy is a wholly owned subsidiary of NW Natural, and NW Natural Gas Storage is a wholly owned subsidiary of NW Natural Energy.

8. The transfer of legal ownership and control is the result of an internal corporate restructuring.

9. On February 23, 2010, the board of directors of NW Natural authorized its officers and directors, subject to advance Commission approval, to take the actions necessary to transfer 100% of NW Natural's membership interest in GRS to its wholly owned subsidiary, NW Natural Energy, and to immediately transfer this membership to NW Natural Energy's wholly owned subsidiary, NW Natural Gas Storage. Upon completion of these transactions, GRS will be wholly owned by NW Natural Gas Storage.

10. The proposed restructuring will change the legal ownership, and the legal, but not actual, control of GRS, and no outside entity will be injected into the GRS chain of ownership.

11. The internal restructuring will allow NW Natural to more appropriately categorize and segregate business segments to facilitate the identification and consolidation of the company's non-utility business activities for reporting purposes, will more clearly distinguish affiliates as separate legal entities from core distribution utility services, and will accommodate other non-core business opportunities that NW Natural may undertake in the future.

12. There will be no change in the officers or operations of GRS.

13. GRS will provide storage services to the public at market-based rates, pursuant to the authority granted by D.09-10-035, and will continue to be bound by all of the terms and conditions of its CPCN.

14. There will be no transfer or assignment of the operating authority held by GRS or result in a name change by GRS as a result of the transaction.

15. Customers of GRS will continue to receive service under the same rates, terms, and conditions that currently apply to those services.

16. It can be seen with certainty that there is no possibility that the transfer of ownership and control of GRS may have a significant effect on the environment because the transfer of ownership and control of GRS will preserve the status quo ante of GRS' plant, operations, and resource use.

17. GRS, NW Natural Energy, and NW Natural Gas Storage are not publicly traded companies.

18. The financial condition of GRS, NW Natural Energy, and NW Natural Gas Storage is not public knowledge, and GRS, NW Natural Energy, and NW Natural Gas Storage are not required to reveal their financial condition to the general public.

19. Notice of this application appeared on the Commission's Daily Calendar on August 20, 2010.

20. There were no protests or responses to this application.

21. No hearings are necessary.

Conclusions of Law

1. The change in legal control and ownership will not negatively affect the continued economic viability of GRS, and will not negatively affect the market or ratepayer groups.

2. As a result of the transaction, NW Natural will continue to indirectly own GRS and therefore will continue to have ultimate control of GRS.

3. The transfer of legal ownership and control of GRS to NW Natural Gas Storage is not adverse to the public interest and should be approved.

4. It can be seen with certainty that there is no possibility that the transfer of legal ownership and control of GRS approved by this decision may have a significant effect on the environment, and, therefore, is exempt from CEQA review, pursuant to CEQA Guidelines § 15061(b)(3).

5. The Financials for GRS, NW Natural Energy, and NW Natural Gas Storage are confidential and their disclosure would place Applicants at an unfair business disadvantage.

6. GRS, NW Natural Energy, and NW Natural Gas Storage's Motion should be granted for two years. During that period, the information should not be made accessible or disclosed to anyone other than the Commission staff except on the further order or ruling of the Commission, the assigned Commissioner, the assigned ALJ, or the ALJ then designated as Law and Motion Judge. If GRS, NW Natural Energy, or NW Natural Gas Storage believes that further protection of the information kept under seal is needed, it should file a motion no later than one month before the expiration date stating the justification for further withholding of the information from public inspection, or for such other relief as the Commission rules may then provide.

7. The Project authorized by D.09-10-035 should continue to be developed and operated as previously authorized, all environmental mitigation measures contained in the certified MND should continue to apply, and all monitoring requirements and restrictions imposed in D.09-10-035, which certified the MND, should continue.

8. Applicants should be required to notify the Director of the Commission's Energy Division in writing of the transfer of control, as authorized herein, within ten days of consummation of the transaction. A true copy of the instrument(s) of transfer should be attached to the notification.

9. This is an uncontested matter in which the decision grants the relief requested, and, therefore the otherwise applicable 30-day period for public review should be waived, pursuant to § 311(g)(2).

10. This decision should be made effective immediately.

ORDER

IT IS ORDERED that:

22. Pursuant to Pub. Util. Code § 854, the joint application of Gill Ranch Storage, LLC (U914G), Northwest Natural Gas Company, NW Natural Energy, LLC, and NW Natural Gas Storage, LLC for authorization to transfer legal ownership and control of Gill Ranch Storage, LLC from Northwest Natural Gas Company to NW Natural Energy, LLC, and from NW Natural Energy, LLC to NW Natural Gas Storage, LLC is approved.

23. The August 13, 2010 Joint Motion of Gill Ranch Storage, LLC, NW Natural Energy, LLC, and NW Natural Gas Storage, LLC, for Leave to File Confidential Materials under Seal is granted. All sealed information must remain sealed for a period of two years after the effective date of this order. After two years, all such information will be made public. If Gill Ranch Storage, LLC, NW Natural Energy, LLC, or NW Natural Gas Storage, LLC believes that further protection of the information kept under seal is needed beyond two years, it may file a motion stating the justification for further withholding of the information from public inspection, or for such other relief as the Commission rules may then provide. This motion must be filed no later than 30 days before the expiration of the two-year period granted by this order.

24. Gill Ranch Storage, LLC, Northwest Natural Gas Company, NW Natural Energy, LLC, and NW Natural Gas Storage, LLC must notify the Director of the Commission's Energy Division in writing of the transfer of control, as authorized herein, within ten days of consummation of the transaction. A true copy of the instrument(s) of transfer must be attached to the notification.

25. The authority granted by this decision will expire if not exercised within 12 months after the effective date of this order.

26. The preliminary determination regarding the need for hearing is changed from yes to no. Hearings are not necessary.

27. Application 10-08-010 is closed.

This order is effective today.

Dated January 27, 2011, at San Francisco, California.

APPENDIX A

Corporate Organization Structure Prior to and After the Proposed Transactions

(END OF APPENDIX A)

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