II. Background
In D.00-05-048, the Commission granted LGS a certificate of public convenience and necessity (CPCN) for the development, construction, and operation of an underground natural gas storage facility and ancillary pipeline, known as the Lodi Facility, located in San Joaquin County approximately 5.4 miles northeast of Lodi.1 The Commission authorized LGS, a new public utility under Pub. Util. Code § 216 and § 222, to provide firm and interruptible gas storage services at market-based rates. D.00-05-048 also certifies the Environmental Impact Report for the LGS project, conditioning the Commission's authority on compliance with mitigation measures set forth in the report.
Two subsequent decisions address additional matters. In D.00-12-026, among other things, the Commission granted LGS limited waivers and exemptions from certain project financing requirements with respect to the project financing then in place. More recently, in D.01-08-023, the Commission authorized LGS to proceed with a replacement debt financing arrangement for the project. D.01-08-023 notes LGS' representation that in the near future it would be filing a joint application with a prospective purchaser to request Commission approval of a change of control of LGS.
This proceeding concerns that application and several subsequent amendments to it. The parties' original proposal is the subject of the initial Application, filed on September 28, 2001, and an Amendment, filed on November 20, 2001 (2001 Amendment).2 The original proposal has been revised and supplanted by an Amendment, filed on October 18, 2002 (2002 Amendment) and a Supplement, filed on November 4, 2002.
Concurrent with the filing of the 2001 Amendment and with the 2002 Amendment, Joint Applicants filed motions requesting orders shortening time for protests and/or responses and limiting the scope of response. The assigned administrative law judge (ALJ) took no action on either motion and these matters are now moot. No protests or responses were filed to the Application or to either Amendment. By rulings on January 4, 2002 and January 15, 2003, the ALJ addressed Joint Applicants' motions regarding for leave to file under seal commercially sensitive, confidential information filed, respectively, as part of the Application and the 2002 Amendment.
1 The LGS project is expected to add 12 billion cubic feet (Bcf) of working gas to California's natural gas storage supplies, with a maximum firm deliverability of 500 million cubic feet per day (MMcf/d) and a maximum firm injection capacity of 400 MMcf/d. D.00-05-048 clarifies that "...this is LGS' project description, and does not refer to PG&E's ability to transport gas to and from LGS." (D.00-05-048 at footnote 4.) 2 An Assigned Commissioner's Ruling (ACR) on May 17, 2002 directed Joint Applicants to supplement the record on market power by responding to questions in the ACR. Joint Applicants filed their response on May 22. A draft decision and Assigned Commissioner's alternate draft decision mailed for public comment on August 7, 2002. That day and for several days thereafter (though the Commission had not acted on either draft decision), trade press articles reported that one of LGS' potential buyers was actively marketing, for resell, its interest in the Lodi Facility. On August 15, 2002 a second ACR issued to set aside submission and require additional information on these reports. Joint Applicants filed the required information on August 26 and this proceeding was resubmitted. Subsequently, the Commission received a letter dated September 13, 2002 from an officer of one of the investors in the proposed transaction, Aquila, Inc, which stated that circumstances underlying the parties' proposal and recounted in both draft decisions had changed with the passage of time. A third ACR issued on September 17, 2002 to set aside submission once more and to require further amendment of the Application or in the alternative, a motion for its withdrawal.
