5. Section 311(e)

Applicants' final argument is that the establishment of the joint receipt point at Otay Mesa, and the setting of rates for that joint receipt point violates section 311(e) because the Commission failed to obtain public comment on material revisions to the PD. (Joint Application, p. 3.)

Section 311(e) provides, in relevant part:

Any item appearing on the commission's public agenda as an alternate item to a proposed decision or to a decision subject to subdivision (g) shall be served upon all parties to the proceeding without undue delay and shall be subject to public review and comment before it may be voted upon. For purposes of this subdivision "alternate" means either a substantive revision to a proposed decision that materially changes the resolution of a contested issue or any substantive addition to the findings of fact, conclusions of law, or ordering paragraphs.

(Pub. Util. Code, § 311(e).⁵ Because we modify the Phase I Decision to eliminate the language setting interim rates for the Otay Mesa joint receipt point, we will only address Applicants' section 311(e) argument concerning the establishment of the Otay Mesa joint receipt point.

TURN's and RACE's contention that we acted in violation of section 311(e) is erroneous. Rule 77.6 of the Commission's Rules of Practice and Procedure, which applies to "Review of and Comment on Alternates to Proposed Decision" states, in relevant part:

(a) For purposes of this rule, "alternate" means a substantive revision by a Commissioner to a proposed decision not prepared by that Commissioner, which revision either:

(1) materially changes the resolution of a contested issue, or

(2) makes any substantive addition to the findings of fact, conclusions of law, or ordering paragraphs.

A substantive revision to a proposed decision is not an "alternate" if the revision does no more than make changes suggested in prior comments on the proposed decision, or in a prior alternate to the proposed decision.

(Rule 77.6 of the Commission Rules of Practice and Procedure, Code of Regs. tit. 20, § 77.6.) As previously noted, our determination to establish Otay Mesa as a joint receipt point in the Phase I Decision was made in response to comments to the PD. Parties also raised this issue in their opening Phase I proposals and comments to the Phase I proposals. The establishment of a joint receipt point at Otay Mesa is not a substantive revision because it does no more than make a change suggested in comments to the PD. Therefore, the addition of the Otay Mesa joint receipt point to the Phase I Decision in response to comments to the PD is not in contravention to section 311(e).

Moreover, Rule 77.6 was issued in rulemaking, R.99-02-001, to determine how to implement new statutory requirements regarding public review and comment for specified Commission decisions in response to SB 779. We issued D.00-01-053 in that rulemaking, which adopted new and amended rules. In D.00-01-053, we decided to adopt a definition of "alternate," as provided in section 311(e), that was based on our historical usage of this term. We determined that "[u]nder that [historical] usage, `decision' or "proposed decision" refers to an agenda item offered and supported by the presiding officer for the relevant proceeding, and `alternate' refers to substantially different version of the agenda item, offered by someone else in preference to the agenda item supported by the presiding officer." (D.00-01-053, p. 8.) TURN, one of the Applicants here, agreed with our conclusion, stating:

Everyone involved in the legislative process that resulted in SB 779 knew the Commission's longstanding definition of "alternate" and the term was used in that traditional context. If the legislature had meant to change that longstanding definition, it would have done so explicitly, but it did not.

(D.00-01-053, p. 7 [citations omitted].) It is clear that our interpretation of section 311(e) is both reasonable and consistent with the language and the intent of the statute.

For the aforementioned reasons, Applicants' argument that we acted in violation of section 311(e) is without merit.

B. RACE's Application for Rehearing

RACE raised several grounds in its application for rehearing on which it claims the Phase I Decision is deficient, but does not provide anything beyond mere assertion of these arguments. RACE contends that there is no record evidence in the proceeding to support the following findings and conclusions in the Phase I Decision: (1) there is an imminent shortage of natural gas; (2) LNG will promote a diverse supply portfolio; (3) LNG has price benefits; (4) the supply of LNG is flexible; (5) LNG will not lead to market-power abuse; (6) LNG will not result in affiliate transaction abuse; (7) the supply of LNG is reliable; and (8) LNG has low safety risks. RACE also argues that Sempra eleventh hour lobbying against evidentiary hearings and for favorable treatment at Otay Mesa was improper.

⁵ Section 311(d) states: "Consistent with the procedures contained in Sections 1701.1, 1701.2, 1701.3, and 1701.4, the assigned commissioner or the administrative law judge shall prepare and file an opinion setting forth recommendations, findings, and conclusions. The opinion of the assigned commissioner or the administrative law judge is the proposed decision and a part of the public record in the proceeding. The proposed decision of the assigned commissioner or the administrative law judge shall be filed with the commission and served upon all parties to the action or proceeding without undue delay, not later than 90 days after the matter has been submitted for decision. The commission shall issue its decision not sooner than 30 days following filing and service of the proposed decision by the assigned commissioner or the administrative law judge, except that the 30-day period may be reduced or waived by the commission in an unforeseen emergency situation or upon the stipulation of all parties to the proceeding or as otherwise provided by law. The commission may, in issuing its decision, adopt, modify, or set aside the proposed decision or any part of the decision. Where the modification is of a decision in an adjudicatory hearing it shall be based upon the evidence in the record. Every finding, opinion, and order made in the proposed decision and approved or confirmed by the commission shall, upon that approval or confirmation, be the finding, opinion, and order of the commission." (Pub. Util. Code, § 311(e).)