2. Background

This proceeding was bifurcated into two phases. Phase one addressed the proposal of San Diego Gas & Electric Company (SDG&E) and Southern California Gas Company (SoCalGas) to integrate the transmission-related costs of their gas transmission systems so that the customers of each utility share in the transmission costs of both gas transmission systems. We approved this proposal in D.06-04-033, which we refer to as the system integration decision. The system integration decision allows customers of both SoCalGas and SDG&E to access natural gas supplies that flow into any existing or new receipt points anywhere on the two systems at the same transmission rate.

Phase two of this proceeding addressed the utilities' proposals to establish a system of firm access rights on the gas transmission systems of SoCalGas and SDG&E and off-system gas delivery. Phase two also addressed whether SoCalGas' peaking rate tariff should be retained. The phase two issues were addressed in D.06-12-031.

Three days of evidentiary hearings were held in September 2005 for phase one, and twelve days of evidentiary hearings were held in August 2006 for phase two.