ALJ/MCK/avs Mailed 12/2/2005
Decision 05-12-007 December 1, 2005
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Joint Application of Lodi Gas Storage, L.L.C. (U-912-G), Western Hub Properties L.L.C. and WHP Acquisition Company II, L.L.C. for Expedited Ex Parte Authorization to Transfer Western Hub Properties' Control of Lodi Gas Storage, L.L.C. to WHP Acquisition Company II, L.L.C. Through the Sale of Western Hub Properties' 50% Interest in Lodi Holdings, L.L.C. to WHP Acquisition Company II, L.L.C., Pursuant to Public Utilities Code Section 854(a). |
Application 05-08-031 (Filed August 24, 2005) |
OPINION APPROVING TRANSFER OF
50% INTEREST IN LODI HOLDINGS, L.L.C.
A. Summary
We approve, subject to the conditions set forth below, the unopposed request of the joint applicants, Lodi Gas Storage, L.L.C. (LGS), Western Hub Properties L.L.C. (Western Hub) and WHP Acquisition Company II, L.L.C. (WHP Acquisition II), for authorization to transfer Western Hub's 50% interest in Lodi Holdings, L.L.C. (Lodi Holdings), the parent company of LGS, to WHP Acquisition II, which is a wholly-owned subsidiary of ArcLight Energy Partners Fund II, L.P. (ArcLight Fund II). LGS was granted a certificate of public convenience and necessity (CPCN) by this Commission to construct and operate an underground natural gas storage facility (and ancillary pipeline) in Decision (D.) 00-05-048.1
Applicants request the authorization pursuant to § 854(a) of the Public Utilities Code. They point out that in D.03-02-071, this Commission approved the transfer of the other 50% interest in Lodi Holdings to WHP Acquisition Company (WHP Acquisition), which is a wholly-owned subsidiary of ArcLight Energy Partners Fund I, L.P. (ArcLight Fund I). Applicants state that ArcLight Fund I and ArcLight Fund II were both formed to invest in the power and energy industries, and that both are managed by ArcLight Capital Partners, L.L.C. (ArcLight Capital Partners), an investment manager headquartered in Boston, Massachusetts. Thus, the practical effect of granting the instant application will be to bring Lodi Holdings and LGS under unified control and management.
In addition to approving the proposed transfer, we conclude that the transactions underlying the transfer qualify for an exemption from the California Environmental Quality Act (CEQA), and that additional environmental review is therefore not required. However, we will retain the restrictions that prevent persons with a beneficial interest in LGS or Western Hub from monitoring implementation of the environmental mitigation measures. In addition, we will prohibit LGS from engaging in any storage or hub service transactions with its ultimate parents, ArcLight Fund I and ArcLight Fund II, or with ArcLight Capital Partners or any of its affiliates.
Today's decision will not affect the rates, terms, or conditions under which LGS operates pursuant to previous Commission decisions.2 LGS will continue to offer market-based rates to noncore natural gas customers in accordance with the requirements of its tariff and the orders of this Commission.
1 This CPCN was subsequently modified in D.03-08-048, 04-05-034 and D.04-05-046.
2 On this question, the application states:
"The change in ownership at the holding company level will not result in the transfer of any certificates, assets, or customers of LGS. LGS will continue to be bound by the terms and conditions prescribed by the Commission in D.00-05-048, as amended . . . LGS will also continue to be subject to the reporting requirements and affiliate transaction prohibitions prescribed by the Commission in D.03-02-071." (Application, p. 2; footnote omitted.)
