3. Section 1701.1
TURN and RACE allege that the Phase I Decision violates section 1701.1 because the Commission's last-minute change to the proposed decision (PD) authorized a new transportation service for gas flowing north from Mexico to SoCalGas' service territory and it established a new rate for this natural gas transportation service. (Joint Application, p. 1.) TURN and RACE claim that "the Commission itself admits that setting rates based on the `joint' receipt point designation is a ratesetting matter." (Joint Application, p. 9 (emphasis in original).) The Applicants' claim that the authorization of such a new service and the setting of rates for a utility service in a quasi-legislative proceeding violate the requirements of section 1701.1. Because we remove the language setting interim rates for the Otay Mesa joint receipt point from the Phase I Decision, we will only address Applicants' section 1701.1 as it applies to the establishment of the Otay Mesa joint receipt point.
TURN and RACE rely on language in section 1701.1 defining the three categories of Commission proceedings to support their argument:
(c) (1) Quasi-legislative cases, for purposes of this article, are cases that establish policy, including, but not limited to, rulemakings and investigations which may establish rules affecting an entire industry.
(2) Adjudication cases, for purposes of this article, are enforcement cases and complaints except those challenging the reasonableness of any rates or charges as specified in Section 1702.
(3) Ratesetting cases, for purposes of this article, are cases in which rates are established for a specific company, including, but not limited to, general rate cases, performance-based ratemaking, and other ratesetting mechanisms.
(Pub. Util. Code, § 1701.1.)2 TURN and RACE, however, do not refer to the language in section 1701.1 preceding the above-quoted language, which provides, in relevant part: "[t]he commission, consistent with due process, public policy, and statutory requirements, shall determine whether a proceeding requires a hearing." The commission shall determine whether the matter requires a quasi-legislative, an adjudication, or a ratesetting hearing." (Pub. Util. Code, § 1701.1(a).) Thus, section 1701.1 clearly states that the Commission has the discretion to determine how to categorize a proceeding as long as it is consistent with the statutory standards.
Phase I was properly categorized as a "quasi-legislative" proceeding because we addressed matters of policy the Phase I Decision. As we stated in the Gas OIR, the Phase I Decision addressed general guidelines for LNG to enter California through Otay Mesa. We made a policy decision, based on record evidence, that Otay Mesa should be a joint receipt point on the SoCalGas and SDG&E systems to "provide LNG developers with assurance that efficient access to the SDG&E and SoCalGas markets will be available . . . ." (D.04-09-022, pp. 54, 66-68.) We acted in accord with section 1701.1 because the establishment of a joint receipt point at Otay Mesa was made as a part our policy to promote LNG development.
For the aforementioned reasons, Applicants' section 1701.1 arguments fail.
2 Rule 5 of the Commission's Rules of Practice and Procedure (Rule 5) further defines the scope of a quasi-legislative proceeding, as well as a ratesetting and an adjudicatory proceeding:
(a) "Category," "categorization," or "categorized" refers to the procedure whereby a proceeding is determined for purposes of this Article to be an adjudicatory, ratesetting, or quasi-legislative proceeding. "Appeal of categorization" means a request for rehearing of the determination of the category of a proceeding.
(b) "Adjudicatory" proceedings are: (1) enforcement investigations into possible violations of any provision of statutory law or order or rule of the Commission; and (2) complaints against regulated entities, including those complaints that challenge the accuracy of a bill, but excluding those complaints that challenge the reasonableness of rates or charges, past, present, or future.
(c) "Ratesetting" proceedings are proceedings in which the Commission sets or investigates rates for a specifically named utility (or utilities), or establishes a mechanism that in turn sets the rates for a specifically named utility (or utilities). "Ratesetting" proceedings include complaints that challenge the reasonableness of rates or charges, past, present, or future. For purposes of this Article, other proceedings may be categorized as ratesetting, as described in Rule 6.1(c).
(d) "Quasi-legislative" proceedings are proceedings that establish policy or rules (including generic ratemaking policy or rules) affecting a class of regulated entities, including those proceedings in which the Commission investigates rates or practices for an entire regulated industry or class of entities within the industry.
(Rule 5 of Commission's Rules of Practice and Procedure, Code of Regs. tit. 20, § 5.)
