3. RACE's Application is Untimely and Lacks Evidence to Support its Arguments

If RACE wanted to question the presumption that there will be an unreliable gas supply in the future, then RACE should have filed an application for rehearing of the Gas OIR.⁹ There is a long lag time for LNG projects, and to grant RACE's request for evidentiary hearings would unnecessarily set back this process for lengthy period of time, making the lag time for LNG projects even longer.¹⁰

Also, RACE did not proffer evidence to support its arguments.¹¹ Rather, it repeatedly made claims that evidentiary hearings may support its arguments. (See e.g., RACE Application, p. 3 [stating, "[f]or instance, RACE would have presented evidence from a wide variety of sources . . . ].") Many of RACE's arguments seem to hinge on its presumption that the Phase I Decision authorized utilities to contract for supplies of LNG on behalf of their core customers. RACE's presumption is erroneous. The Phase I Decision clearly did not authorize utilities to enter into these types of contracts, and also ruled that LNG contracts must be submitted to us for prior approval. (D.04-09-022, pp. 6, 86 [Finding of Fact 34] (determining that "[i]t is reasonable to review core supply contracts for the direct purchase of LNG or regasified LNG through the advice letter or application processes only").)

RACE's other arguments similarly lack merit. For example, its claim that we are not cognizant of the threat of affiliate-transaction abuse that LNG poses is misplaced. (RACE Application, p. 14.) The Phase I Decision did not make any determinations concerning affiliate transaction abuse. While some issues RACE raised concerning affiliate transaction abuse may warrant further consideration, this is not the appropriate forum to address these concerns. RACE should raise these issues when utilities bring their specific applications for authorization to purchase regasified LNG for their core customers before the Commission. The other concerns that RACE raises in its application for rehearing¹² are all issues that were either addressed prior to the Commission's issuing the OIR, or are issues that we will address in later phases of this proceeding or in specific applications.

⁹ Otherwise, RACE's argument constitutes an impermissible collateral attack. (Pub. Util. Code, §1709.)

¹⁰ In the Gas OIR, we stated that "[w]e must make a number of decision related to these issues this year, due to the long lead time to construct LNG facilities and due to certain deadlines in 2004 involving existing intestate pipeline capacity contracts and open seasons for new pipelines, including pipelines related to LNG projects." (R.04-01-025, p. 3.)

¹¹ RACE's late-filed exhibits did not provide any further enlightenment on these issues.

¹² Such as the record's deficiencies on matters concerning whether LNG promotes a diverse supply portfolio, whether LNG has price benefits, is flexible, will lead to market power abuse, is reliable, and has low safety risks.