ALJ/CFT/hkr Mailed 11/26/2002
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Investigation into the Gas Market Activities of Southern California Gas Company, San Diego Gas and Electric, Southwest Gas, Pacific Gas and Electric, and Southern California Edison and their impact on the Gas Price Spikes experienced at the California Border from March 2000 through May 2001. |
FILED PUBLIC UTILITIES COMMISSION NOVEMBER 21, 2002 SAN FRANCISCO OFFICE INVESTIGATION 02-11-040 |
ORDER INSTITUTING INVESTIGATION
PHASE I
Summary
The price of natural gas delivered to the California border was extraordinarily high in 2000 and 2001, particularly during the period between December 2000 and May 2001. The Commission has already filed a complaint at the Federal Energy Regulatory Commission (FERC) and litigated against El Paso Natural Gas Company (El Paso) and its marketing affiliate for their manipulation of natural gas supplies to California, which was a substantial cause of the natural gas price spikes. In this investigation, the Commission will examine if there were additional reasons for these price spikes. We will approach this investigation in two phases. In Phase I we name as Respondents the Sempra Energy Companies, Southern California Gas Company (SoCalGas) and San Diego Gas & Electric Company (SDG&E). Respondents in Phase II are Southwest Gas (SW Gas), Pacific Gas and Electric Company (PG&E), and Southern California Edison Company (Edison). Phase II will commence at a time to be set forth in a future Commission Ruling. In each Phase, respondents are ordered to present evidence which supports all gas market activity that may have affected gas prices during the period March 2000 through May 2001, and to submit testimony explaining the reasons for the natural gas price spikes during this same period. Other non-jurisdictional entities and especially affiliate trading entities of the utilities are also encouraged to submit evidence and testimony related to the reasons for the natural gas price spikes that occurred during this period.
The focus of Phase I of this proceeding is investigatory and fact-finding. The Commission will investigate the past conduct of the respondents with regard to gas price spikes at the California Border from March 2000 through May 2001. The proceeding is categorized as ratesetting. If the investigation reveals that the conduct of respondents contributed to the gas price spikes at the California border during the named period, it may modify or eliminate the respondent's Gas Cost Incentive Mechanism (GCIM), reduce the amount of the shareholder award for the period involved, or order respondents to issue a refund to ratepayers to offset the higher rates paid. If the investigation reveals that statutory laws, or rules or orders of the Commission were violated, the Commission may enter into an ad judicatory phase of this investigation.
