ALJ/XJV/K47 Mailed 5/30/2007

Decision 07-05-061 May 24, 2007

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Joint Application of SFPP, L.P. (PLC-9 Oil), CALNEV PIPE LINE, L.L.C., KINDER MORGAN, INC., and KNIGHT HOLDCO LLC for Review and Approval under Public Utilities Code Section 854 of the Transfer of Control of SFPP, L.P. and CALNEV PIPE LINE, L.L.C.).	Application 06-09-016 (Filed September 18, 2006)
Joint Application of The Goldman Sachs Group, Inc., American International Group, Inc., Carlyle Partners IV, L.P., Carlyle/Riverstone Global Energy and Power Fund III, L.P., for Exemption Under Section 852 of the Public Utilities Code for Certain Future Transactions Involving Non-Controlling Interests in California Public Utilities.	Application 06-09-021 (Filed September 22, 2006) [Formally Consolidated]

INTERIM OPINION APPROVING, WITH CONDITIONS, TRANSFER OF INDIRECT CONTROL AND AUTHORIZING, WITH CONDITIONS,
EXEMPTION FROM PUBLIC UTILITIES CODE SECTION 852
FOR SOME INVESTORS IN KNIGHT HOLDCO

TABLE OF CONTENTS

Title Page

INTERIM OPINION APPROVING, WITH CONDITIONS, TRANSFER OF INDIRECT CONTROL AND AUTHORIZING, WITH CONDITIONS, EXEMPTION FROM PUBLIC UTILITIES CODE SECTION 852 FOR SOME INVESTORS IN KNIGHT HOLDCO 22

1. Summary 22

2. Identity of SFPP, Calnev and Other Parties 33

2.2.1. De Jure & De Facto Relationships 55

2.2.2. Calnev Problem & Remedy 88

3. Request for Public Utilities Code Section 854 Authority 1414

3.3.1. Impact on Future Rates, Terms, and Conditions of Service 2626

3.3.2. Impact on Access to Books and Records 3838

3.3.3. Impact on Any Refunds Owed by SFPP 3939

3.3.4. Acknowledgment of Conditions 4343

4. Request for Section 852 Exemption 4545

5. Procedural History and Miscellaneous Procedural Matters 5555

6. Resolution of Outstanding Motions 5757

7. Comments on Proposed Decision 5757

8. Assignment of Proceeding 5959

Findings of Fact 5959

Conclusions of Law 6767

INTERIM ORDER 6969

Attachment 1 Ex. J (Pre-Transaction) to the Section 854 Application

Attachment 2 Ex. PKA-3 to Ex. 102

Attachment 3 Ex. J (Post-Transaction) to the Section 854 Application

Attachment 4 Section 852 Exemption Terms

1.

INTERIM OPINION APPROVING, WITH CONDITIONS, TRANSFER OF
INDIRECT CONTROL AND AUTHORIZING, WITH CONDITIONS,
EXEMPTION FROM PUBLIC UTILITIES CODE SECTION 852
FOR SOME INVESTORS IN KNIGHT HOLDCO