Procedural Background

In response to these developments, the Commission opened Investigation (I.) 01-06-047 on June 28, 2001. The order instituting the investigation required Southwest to explain its procurement practices, to justify the rapid increases in gas costs, and to provide detailed information on its gas costs for the period June 1, 1999 through May 31, 2001. The Commission ordered Southwest to file a report on its gas purchasing activities and these matters on July 18, 2001.

On August 22, 2001, an Administrative Law Judge's (ALJ) ruling set a prehearing conference (PHC) for August 31, 2001 in Victorville and posed a series of questions for Southwest concerning how its gas procurement activities fit into the larger context of regional gas markets.

At the August 31 PHC, the Office of Ratepayer Advocates (ORA) and the County of San Bernadino (County) and the City of Big Bear Lake entered formal appearances in the proceeding and participated with Southwest in discussions concerning the management of the proceeding. In addition, because of the intense public interest and public attendance at the August 31 PHC in Victorville, Commissioner Wood and ALJ Sullivan elected to hold a public participation hearing (PPH) to accommodate those in attendance.

A September 13, 2001 ruling set the scope and schedule for this proceeding. In response to a request of ORA, a November 14 ruling modified and extended the proceeding's schedule.

SWG served opening testimony on October 15, 2001. ORA and the County served responsive testimony on December 14, 2001. Southwest served rebuttal testimony on January 14, 2002.

A PPH was held at the City of Big Bear Lake on January 8, 2002. A PPH was also held in Apple Valley on January 9, 2002.

Evidentiary hearings were held on January 22, January 23 and February 1, 2002 in San Francisco. A closing argument was held on February 1, 2002 before Commissioner Wood and ALJ Sullivan. With the filing of reply briefs on March 8, 2002, the proceeding was deemed submitted.