7. Unbundled Storage Proposals
Applicants propose that if the core portfolios are combined, then SoCalGas will make available to the unbundled storage market at least 51 Bcf of inventory capacity as long as the system balancing allocation remains at 5.3 Bcf and the core's combined storage reservation remains at 70 Bcf. Applicants argue that this provision will give more certainty to unbundled storage customers as to the amount of inventory capacity available to purchase. This proposal is predicated on adoption of Applicants' proposal to reduce core inventory capacity reservation levels, as discussed above. DRA expresses opposition to this proposal insofar as DRA opposes a reduction in core inventory capacity.
Since we decline to approve Applicants' proposed reduction in core storage inventory, the conditions underlying Applicants proposal here for making additional storage available to the noncore cannot be met. Therefore, this proposal is not adopted.
Applicants propose a cap of $20 million in annual shareholder earnings from unbundled storage services, with continuation of the currently authorized 50/50 sharing of noncore storage earnings below the cap. The current risk sharing allocation was adopted in the SoCalGas 1999 BCAP in A.98-10-012. The $20 million per year earnings cap is about equal to the peak annual amount reported in the Noncore Storage Balancing Account for 2005. Applicants propose that market-based pricing continue in effect based on any new asset and cost allocations that may be established in upcoming BCAPs. Applicants argue that these provisions represent a balanced outcome for customers and shareholders. Applicants further propose that any unbundled storage earnings above the $20 million cap be refunded to customers.
Coral opposes this proposal, arguing instead for the termination of the 50/50 sharing mechanism, and for the pricing of unbundled storage on a cost-of-service basis. SCGC proposes that both unbundled storage revenues and the unbundled storage revenue requirement be split 50/50 between ratepayers and shareholders. SCGC argues that the current 70/30 allocation of revenues requirement creates an asymmetry which provides for a grossly disproportionate benefit to SoCalGas shareholders. SCGC also argues that storage rates be capped at fully-scaled long-run marginal cost.
SCGC argues that $20 million cap on shareholder earnings is excessive, and that the cap should be limited to $5 million per year. In 2005, the unbundled storage program yielded $27.2 million in net revenues, with $7.2 million going to ratepayers and $20 million going to shareholders. Shareholders only put $10.3 million at risk each year. In 2006, ratepayers were responsible for $24.6 million (or 70% of the total revenue requirement). From its inception, ratepayers have received only 6% of the more than $95 million of cumulative net revenues from unbundled storage, while shareholders received 94%. SCGC argues that limiting the cap to $5 million per year would result in the shareholder earnings being capped at a level that was reasonably foreseeable when parties entered into the Joint Recommendation in the SoCalGas 1999 BCAP.
Applicants challenge the validity of SCGC's proposed 50/50 allocation, arguing that it is predicated on a notion that was specifically rejected in the last BCAP, namely, that the long run marginal cost (LRMC) scalar should be fully allocated to the at-risk unbundled storage program. To the contrary, Applicants assert that SoCalGas was not put at risk for the fully scaled marginal cost of storage in the 1999 BCAP proceeding. Because the fully scaled LRMC incorporated non-storage costs such as distribution, transmission, and customer costs, the Commission declined to adopt it for purposes of allocating risk to shareholders for unbundled storage. Instead, the Commission utilized unscaled marginal costs, reflecting the $21 million figure for allocating risk, stating:
"Since SoCalGas is accepting a significantly greater level of risk for the unbundled program it is reasonable for the level of risk to be set close to the unscaled marginal costs."73
Applicants agree that the $21 million cost figure for at-risk unbundled storage, which has been in effect since the 1999 BCAP proceeding, should be updated in the upcoming BCAP proceeding to reflect the significant changes in embedded cost of unbundled storage that have occurred since then.
Applicants argue that intervenors' proposals to apply cost-based rates for unbundled storage would be detrimental to most ratepayers that do not require use of unbundled storage services as well as to other G-TBS storage customers who are satisfied with the program.
As noted by DRA, the current 50/50 risk sharing mechanism was instituted at a time when there was concern over the potential for stranded storage capacity. The 50/50 sharing was perceived as an incentive that was needed for SoCalGas to market that storage. Due to the subsequent increase in demand for SoCalGas storage services, however, the resulting prices and revenues have risen to unforeseen levels. Since 2000, ratepayers have received only $6 million in storage revenues while shareholders received $89 million, more than 14 times more. To allow for adequate analysis of the appropriate allocation of revenue sharing, DRA proposes that all revenues and costs be booked into a new noncore storage memorandum account for disposition in the next BCAP proceeding where sharing allocations and earnings caps can be determined.
Applicants respond that the prospects of shareholder earnings capped at $5 million is not a sufficient incentive for SoCalGas to expand storage capacity. Applicants believe that a $5 million cap would, in effect, approximate zero earnings over the long term as a result of periodic adjustments in each BCAP which would adjust both the fully-scaled LRMC rates as well as the units of unbundled storage to which those rates applied.
Applicants argue that a $20 million cap is large enough to provide an incentive to market unbundled storage in an aggressive and innovative manner, while putting a limit on "windfall" revenues. Applicants believe that a $20 million cap is consistent with other forms of incentive mechanisms such as the GCIM and demand side management in which annual awards substantially exceeded $5 million.
We agree with Applicants that rates for unbundled storage services should continue to be market-based rather than cost-based. As noted by Applicants, the use of cost-based rates would be detrimental to most ratepayers by denying them any share of the market-based value of unbundled storage that exceeds cost. Also, cost-based pricing would undermine the flexibility to offer customer-tailored storage services because certain storage products could be above market while others could be below market. In such a situation, the utility would likely have to offer a single product with the same injection and withdrawal ratios so as not to strand any particular product. Moreover, cost based pricing would undermine the incentive for the construction of new third-party storage fields since competitors would not be likely to realize a profitable return on invested capital if forced to compete against the utility's low prices.
Therefore, in consideration of these factors, we reject cost-based pricing and approve the continued use of market-based rates for unbundled storage, as proposed by Applicants. The question remains, however, as to what is the appropriate ratepayer/shareholder allocation of revenues in excess of costs, and what maximum shareholder earnings cap provides the appropriate balance between incentives to utility management while keeping ratepayer costs at a reasonable level.
We decline to adopt Applicants' proposal for 50/50 sharing with a $20 million cap on shareholder earnings. We conclude that a cap as high as $20 million has not been justified as being necessary to provide utility incentives to market unbundled storage. Also, as noted by DRA, market conditions have changed significantly since the time when the 50/50 sharing allocation for unbundled storage revenues was adopted in 1999. The concern at that time was storage capacity exceeded demand such that a monetary incentive was deemed appropriate to induce the utility to aggressively market the storage capacity. Yet in the eight years since then, demand for storage capacity has increased dramatically. For example, in the storage auction conducted by SoCalGas under the G-TBS tariff, the bidding went for 10 rounds. Even at the price established in the tenth round, customers who wanted storage opted to accept prorationing rather than to continue into an 11th round.74
While SCGC has offered an alternative allocation and cap proposal, Applicant has identified certain problems with the SCGC proposal, as noted above. Therefore, in view of the problems noted by Applicants, we also decline to adopt the SCGC allocation and earnings cap proposal at this time.
DRA has argued that the appropriate allocation of unbundled storage revenues should be decided in the next BCAP. We agree that a more informed judgment can be made regarding the appropriate allocation through the more complete analysis through the upcoming BCAP proceeding.
Accordingly, we defer adoption of any explicit revenue cap or percentage allocation applicable unbundled storage revenue to the BCAP. On an interim basis between the effective date of this decision and a decision in the BCAP proceeding, we hereby direct that all noncore storage costs and revenues be recorded in a memorandum account. Based upon further analysis in the upcoming BCAP as to the appropriate shareholder percentage allocation and cap for unbundled storage revenues, the revenues recorded in the BCAP memorandum account shall be allocated between shareholders and ratepayers.
With this approach, the Commission will preserve the option to apply any adopted findings in the upcoming BCAP to revenues booked into the memorandum account from the effective date of this decision going forward. Thus, any potential for ratepayer inequities resulting from an excessive
shareholder allocation or revenue cap will be avoided. Likewise, the opportunity will be preserved to determine the appropriate shareholder allocation and cap to provide an adequate incentive to market unbundled storage and increase unbundled storage capacity consistent with the realities of the current market conditions. With this disposition, any potential for inequities resulting from an improper allocation of noncore storage revenues will be avoided, while additional time will be provided to develop a more complete record as a basis to determine the appropriate revenue sharing allocation formula and shareholder earnings cap to be applied on a longer-term basis in the upcoming BCAP.
Applicants propose that all unsubscribed storage capacity be made available for customer subscription under the new storage tariffs, with the provision for SoCalGas to impose limits on the amount of unbundled storage services that a customer may acquire. SoCalGas agrees to post all storage transactions on its EBB within one business day of execution, including counterparty name, quantity of storage services contracted on an unbundled basis, contract prices, and contract term. Applicants also propose a meet-and-confer process for market participants concerned about not being offered the same prices and terms as other posted transactions.75
Applicants propose that new rate caps be established for unbundled storage service at levels below the current maximum G-TBS tariff rate of $14.27/decatherm (dth), with SoCalGas' reservation charges for firm storage service not to exceed the following amounts: (1) $1.63/dth for inventory capacity; (2) $60/dth/day for injection capacity; and (3) $30/dth/day for withdrawal capacity. Applicants further propose that interruptible injection and withdrawal service be established that are prioritized on the basis of price and capped at $2/dth each.
Applicants' proposed G-TBS tariff rate caps are above SoCalGas' estimates of the 15-year levelized cost of expanding each storage product, and are above the market prices obtained in its 2006 Storage Open Season, as summarized below:
Storage Product Proposed Cap 15-year 2006
Expansion Cost Open Season
Inventory $1.63/dth $0.60/dth $1.35/dth
Injection Capacity $60/dth/d $39.90/dth/d $39.90/dth/d
Withdrawal Capacity $30/dth/d $20/dth/d $11.60/dth/d
Applicants argue that the proposed price caps can provide the proper signals for storage expansions and set a reasonable limit on the price for available storage capacity during periods of high demand and high market value.
Coral argues that rate caps should be based upon SoCalGas' actual cost of service, based on embedded cost or scaled long-run marginal cost. Coral also argues that 100% of revenues in excess of cost should be returned to ratepayers.
SCGC argues that although Applicants' proposed rate caps are an improvement upon the existing ceiling rates in SoCalGas Schedule G-TBS, the proposed rate caps are still too high to provide meaningful relief. The proposed inventory rate is 441% of the current scaled inventory LRMC rates. The proposed injection ceiling rate is 174% of the current scaled LRMC rate, and the proposed withdrawal ceiling is 152% of the scaled LRMC rate. The proposed ceiling rates are also above the 2006 open season rates for inventory injection, and withdrawal capacity, and are also above what SoCalGas projects as its 15-year cost of storage expansion.
SCGC argues that unbundled storage services should be offered through an annual open season process, similar to the process established for firm access rights in D.06-12-031. Under the SCGC proposal, all unbundled capacity that is not committed through long-term contracts would be made available on an annual basis through a two-step process. In the first step, unbundled capacity would be awarded to on-system end-use customers that submit bids in the open season. On-system end-use customers would have the opportunity to bid for unbundled storage ahead of others, just as they are allowed to do in bidding for firm access rights.
SCGC proposed ceiling rates based on fully-scaled LRMC for unbundled storage capacity that is awarded in Step 1 of the open season to on-system end-use customers.76 SCGC proposes a cap on the applicable unbundled storage capacity rate offered through Step 1 of the open season because SoCalGas has a monopoly on the provision of storage service for reliability purposes to on-system end-use customers within its service territory. SCGC's proposed cap would be substantially below Applicants' proposed rate as well as 2006 open season rates. The following table shows a comparison of the SCGC's proposed caps versus Applicants' proposal, along with 2006 Open Season prices:
Comparison of SCGC Proposed Price Caps with Market Prices and Costs | ||||
SCGC Caps at Fully-Scaled LRMC |
Applicants' Caps |
2006 Open Season |
15-Year Expansion Cost | |
Inventory |
$0.38/Mcf77 |
$1.63/dth |
$1.35/dth |
$0.60/Mcf |
Injection Capacity |
$35.40/Mcf/d |
$60/dth/day |
$39/dth/day |
$39.90/Mcf/d |
Withdrawal Capacity |
$20.33/Mcf/d |
$30/dth/day |
$11.60/dth/day |
$20/Mcf/d |
SCGC proposes that the cap on capacity awarded through Step 1 of its two-step process should be set at fully scaled long run marginal cost, and that the fully scaled LRMC ceiling rate be subject to upward adjustment in the SoCalGas BCAP, currently scheduled for the forth quarter of 2007. Given the amount of unbundled storage service quantities that are currently available, SCGC believes that SoCalGas could recover approximately $44 million in revenues by charging scaled LRMC-based rates for unbundled storage capacity.78 Assuming a 50/50 sharing of costs and revenues, shareholders and ratepayers would each be allocated a net amount of approximately $4.5 million.
Under SCGC's proposed process, on-system end-use customers would be offered unbundled storage before marketers, brokers and off-system customers. Applicants claim that SCGC's two-step process would have no meaningful second step because almost all unbundled storage inventory and injection would be allocated at the fully-scaled LRMC rates to end-users in Step 1 of the open season. Applicants further argue that because marketers and brokers serve many of SoCalGas' smaller noncore customers, such customers would be unfairly denied access to unbundled storage under SCGC's open season process which excludes marketers and brokers from Step 1.
In order to prevent the Step 1 process from being used as a front for marketers, SCGC proposes a limitation that end-use customers may resell such capacity only to other on-system end-use customers. As an additional measure to guard against gaming, SCGC proposes that on-system end-use customers be permitted to sell the capacity only at the as-billed rate (i.e., the rate that would be charged to the end-use customer by SoCalGas under the customers' storage contract with SoCalGas).
All capacity that is not committed through long-term contracts or awarded on an annual basis in Step 1 of the open season would then be made available in Step 2 for bidding by all creditworthy market participants, including marketers, brokers, and off-system customers to the extent that off-system customers may have access to the SoCalGas system.
We shall adopt Applicant's revised caps as an interim measure subject to further review and possible adjustment in the next BCAP. We decline to adopt the proposal of SCGC to set rate caps equal to the fully-scaled LRMC. As previously noted, we conclude that capping unbundled storage rates at the levels proposed by SCGC would be detrimental to ratepayers by denying them the benefits of the additional revenue flow-through resulting from rate levels that are more market-based. Market-based pricing of storage assets also promotes more economically efficient allocation of these assets.
Although SCGC argues that its cost-based caps are warranted because SoCalGas has a monopoly on the provision of storage services, the evidence indicates that there is a competitive market for storage from various sources including flowing supply, secondary markets, other storage fields and core storage. Applicants' witness Watson presented an analysis of market share concentration, taking into account such supply sources that are competing with unbundled storage. His analysis indicated a Herfendahl-Hirshman Index (HHI) of about 1,400. Under Federal Energy Regulatory Commission (FERC) guidelines, if the HHI is below 1800, FERC assumes that there is limited market concentration with less potential for any participant to exercise significant market power.79 In addition, while monopoly prices would be expected to be below the capped maximum rate, the actual G-TBS rates charged for unbundled storage were actually below the fully-scaled LRMC until 2006.80 Therefore, we are not persuaded to adopt SCGC's capped rates based on claims of monopoly pricing of unbundled storage.
We also decline to adopt SCGC's two-step open season process. As noted by Applicants, SCGC's proposal leaves too many potential opportunities for gaming. SCGC's proposed remedy would increase discrimination against marketers and brokers even from secondary sales. Several large end-users also have large marketing affiliates. Moreover, an end-user without a marketing affiliate can purchase excess storage capacity in the end-user open season and then allow a marketer to be its agent for the excess capacity. SCGC's second proposed remedy is unworkable because sellers will figure out ways to extract additional compensation indirectly (e.g., including extra charges or other offsets in another transaction).
Applicants propose that the new unbundled storage reservation rates and shareholder earnings caps be allowed to change proportionately with changes in the revenue requirement for the unbundled storage program from an overall increase in revenue requirement from sources such as a GRC, annual inflation adjustment, or storage facility investment. Applicants also propose that the shareholder earnings cap be allowed to change proportionately due to cost allocation changes to the unbundled storage revenue requirement.81
DRA recommends that the issue of cap adjustments be deferred until the next BCAP. Applicants disagree with such deferral, arguing that the proposed cap change provisions are crucial elements of the overall package of changes presented in this application.
Indicated Producers argue that the caps should not change without specific Commission approval. Applicants disagree, arguing that it would be extremely inefficient and serve no reasonable purpose to require such regulatory approval.
We decline to approve Applicants' proposal to allow changes in the storage reservation rates and shareholder earnings caps resulting from system-wide increases in revenue requirements. Applicants have not provided a sufficient justification for this proposal. Merely because certain variables may result in changes in the utility revenue requirement over time, the implementation of such changes do not necessarily warrant a corresponding change in level of storage reservation rates or earnings caps without any opportunity for Commission review. A direct one-for-one relationship does not automatically apply between such changes and potential related effects on the appropriate level of storage reservation rates or earnings caps. Applicants' proposal would eliminate safeguards that are currently in place for Commission review and approval of requests to change storage rates or earnings caps. Accordingly, this proposal is not in customers' best interests, and we shall not approve it.
Applicants propose that the System Operator make available for release on an interruptible basis, all unutilized receipt point access capacity and storage capacity at up to 100% of firm capacity reservation charges. If SoCalGas' transmission revenue balancing account is undercollected, any interruptible receipt point access revenues will be credited on an annual basis to the balancing account until the undercollection is eliminated. If the balancing account is not undercollected, Applicants propose that 90% of the interruptible receipt point access revenues will be credited to the balancing account, with SoCalGas shareholders retaining the remaining 10%, subject to an annual cap of $5 million as a financial incentive.
Coral, DRA, the Indicated Producers, and SCGC all oppose the 90/10 sharing of interruptible access charge revenues between ratepayers and shareholders, arguing that 100% of the revenues should be credited to ratepayers. They argue that the proposal for a 10% shareholder allocation is inconsistent with D.06-12-031 in which a similar proposal was rejected. In D.06-12-031, the Commission found no need to provide SoCalGas with an allocation of interruptible access charge revenue as an incentive to sell unused receipt point capacity insofar as SoCalGas is already required by its tariff to make all unused capacity available. These parties cite D.06-12-031, where we stated:
"Under the proposed G-RPA tariff, SoCalGas is obligated to "make available all unutilized firm receipt point access capacity on an interruptible basis..." (Ex. 15, Schedule No. G-RPA, Special Condition 67). There is no need to provide SoCalGas with an incentive to sell unused receipt point access capacity when it is required under the tariff to do so." (D.06-12-031 at 92.)
They also cite the following passage:
"SoCalGas is also obligated under the proposed G-OSD tariff to "make available physical displacement capability at the receipt points on an interruptible basis ... ." (Ex. 15, Schedule No. G-OSD, Special Condition 9.) If gas marketers have excess supplies that they want to sell in northern California, they will seek out the availability of this interruptible service. Accordingly, the proposals for a sharing incentive mechanism for interruptible off-system service revenues are not adopted." (D.06-12-031 at 114.)
Although a similar proposal was rejected in D.06-12-031, Applicants' were permitted to seek approval of the proposal in this proceeding by Administrative Law Judge's (ALJ) ruling. As a basis for seeking approval in this proceeding, applicants argue that without a financial incentive, as provided under its proposal, SoCalGas and its employees would not apply "the same level of vigor and innovation" in the marketing, discounting, and promoting the use of interruptible access rights. Given SoCalGas' limited resources and the conflicting demands on its employees' time, Applicants argue that little marketing, discounting, or promoting of such capacity is likely without a financial incentive to do so. Applicants argue that, as a result, only a few interruptible access transactions would be executed in response to requests from a few sophisticated marketers and end-use customers. Consequently, Applicants contend, ratepayers would be receive greater benefit from 90% of the revenues resulting from active marketing of the interruptible access product as opposed to 100% of the revenues from only limited marketing.
Applicants are essentially repeating similar arguments in support of this proposal that were previously considered and rejected in D.06-12-031. As we concluded in that proceeding, if gas marketers have excess supplies that they want to sell in northern California, they will seek out the availability of this interruptible service on their own. Accordingly, consistent with our reasoning on this issue previously, we again reject Applicants proposal for a 90%/10% sharing of interruptible revenue.
Applicants propose that three existing SoCalGas storage tariffs, G-AUC, G-LTS, and G-BSS, be closed to new subscriptions for five years, and that all storage be sold through the new G-TBS schedule which is designed as the vehicle for all new unbundled storage transactions.82
Although DRA proposed addressing this issue in the next BCAP, it offered no testimony on this issue. Both Long Beach and Southwest expressed concerns about the need for certainty for planning purposes and Long Beach testified as to the danger that SoCalGas can unilaterally refuse requests for three-year G-TBS contracts. As noted by Applicants, Schedule G-AUC has not been used at all, and less than 0.2 Bcf has been sold under G-BSS. No similar rationale or explanation was offered by Applicants as to why Schedule G-LTS should be closed, merely the conclusory statement that revisions to G-TBS make G-LTS unnecessary. The Applicants have not shown they would be harmed by retaining Schedule G-LTS as a storage service option. Because of the lack of support and the need to provide opportunity for greater certainty for planning purposes, we are not convinced there is an adequate record to conclude the revisions to the G-TBS tariff make the G-LTS tariff unnecessary. Given these facts, we approve Applicants' proposal to close Schedule G-AUC and G-BSS tariffs to new subscription for five years.
However, the moratorium for G-LTS is not approved and SoCalGas will continue to offer the G-LTS tariff for new subscriptions. Parties are free to address this matter in the next BCAP. The revisions to Schedule G-TBS still do not require SoCalGas to honor requests for longer-term G-TBS contracts, however, the modifications we adopt for G-TBS for wholesale core customers later in this decision should alleviate some of these wholesale customer concerns. Consistent with core parity principles and the need for planning certainty, Schedule G-TBS should be further modified to permit contracts up to five (5) years in duration for wholesale core customer requirements without requiring further Commission approval. The Applicants' proposal to allow G-TBS contracts for up to three years without requiring Commission approval for other noncore customers is approved.
As a provision of the Edison Settlement, Applicants propose that SoCalGas provide a storage development plan to increase the storage capacity and operational capability of its existing storage services, to be made available to SoCalGas customers on an open access basis. Applicants propose that SoCalGas storage rate shareholder earning caps would increase as described in sponsoring testimony. Expansions of unbundled storage capacity would be rate based and allocated to unbundled storage costs subject to the 50/50 risk-sharing mechanism.83
DRA supports this proposal as long as no predetermined risk sharing mechanism is authorized in this proceeding. SCGC proposes an alternative rate cap. Coral believes that all new and existing storage should be priced on a cost-of-service basis.
We approve Applicants' proposal to provide a storage development plan to increase the storage capacity and operational capability of its existing storage services, to be made available to SoCalGas customers on an open access basis. We defer a determination as to the appropriate rate design and risk-sharing mechanism for any storage expansion pending consideration in the next BCAP.
Applicants propose to establish and administer a secondary market for storage capacity rights to enable holders of firm rights to trade those rights separately, in whole or partially, on a permanent or short-term basis. SoCalGas would administer an electronic bulletin board through which the secondary market for storage capacity and imbalance trading would function. The EBB, at a minimum, would provide an index of contractual storage rights, specifying the storage inventory capacity, daily withdrawal and injection capacity rights, and terms for each customer. SoCalGas and SDG&E would recover in retail rates all reasonable costs of establishing and maintaining storage rights, a secondary market for such rights, an imbalance trading program, and related EBB.
Coral, Indicated Producers, and DRA support the establishment of a secondary market for storage rights. SoCalGas agreed to include the provision in its proposed G-SMT tariff that a customer who releases the full amount of its contracted storage capacity for the full remaining term of its storage contract for the full price to a party that meets SoCalGas' creditworthiness requirements should be relieved of any ongoing obligation to SoCalGas under that storage contract.84
We approve Applicants' proposal to establish and administer a secondary market for storage capacity rights to enable holders of firm rights to trade those rights separately, in whole or partially, on a permanent or short-term basis, as described above. We agree with Applicants that a secondary market for trading storage rights will enhance the long term value of storage and enable any holder of storage rights to compete with additional direct sales of storage by SoCalGas through the unbundled storage program.
73 D.00-04-060, mimeo. at 146 (FOF 54).
74 Ex. 16, SDG&E Advice Letter 1559-G, pp.2-3; 2 Tr. 272:19- 273:6, SoCalGas/SDG&E Watson.
75 The proposed provisions are set forth in Applicants' proposed Schedule G-TBS (Appendix Y to Watson Testimony, Ex. 8).
76 SCGC Opening Brief at 25-29; Ex. 25 at 16-17 (SCGC/Yap).
77 Mcf is 1,000 cubic feet.
78 Ex. 25 at 16 (SCGC/ Yap).
79 Ex. 9 (Watson Rebuttal) at 10-11.
80 Id. at 13.
81 Ex. 8 (Watson) describes how these changes are intended to work.
82 See Ex. 8 (Watson) at 5.
83 Ex. 8 (Watson) at 5-6.
84 Tr. at 211-12 (SoCalGas/Watson). The proposed G-SMT tariff is Appendix X to Ex. 8 (Watson Testimony). The relevant provision is Special Condition 12 at Sheet 3.
