STATE OF CALIFORNIA GRAY DAVIS, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

April 17, 2003 Agenda ID #2090

TO: PARTIES OF RECORD IN APPLICATION 02-09-006

This is the draft decision of Administrative Law Judge (ALJ) Vieth and the alternate draft decision of Commissioner Lynch. They will not appear on the Commission's agenda for at least 30 days after the date they are mailed. The Commission may act then, or it may postpone action until later.

When the Commission acts on the draft decision or the alternate, it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.

Parties to the proceeding may file comments on the draft decision and alternate draft decision as provided in Article 19 of the Commission's "Rules of Practice and Procedure." These rules are accessible on the Commission's website at http://www.cpuc.ca.gov. Pursuant to Rule 77.3 opening comments shall not exceed 15 pages. Finally, comments must be served separately on the ALJ and all Commissioners, and for that purpose I suggest hand delivery, overnight mail, or other expeditious method of service.

/s/ Angela K. Minkin

Angela K. Minkin, Chief

Administrative Law Judge

ANG: avs

ALJ/XJV/avs DRAFT Agenda ID #2090

Ratesetting

Decision DRAFT DECISION OF ALJ VIETH (Mailed 4/17/2003)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Wild Goose Storage, Inc., for Review under Public Utilities Code Section 851 et seq. of the Transfer of Indirect Control of Wild Goose Storage, Inc., to Encana Corporation or, in the Alternative, Request for Declaratory Order

Application 02-09-006 (Filed September 3, 2002)

O P I N I O N

TABLE OF CONTENTS

OPINION 22

I. Summary 22

II. Background 22

III. The Nature of the Transaction and the Relief Requested 33

A. Overview of the Transaction 33

B. Parties to the Transaction 44

C. Relief Requested 55

IV. Discussion 66

A. Applicability of § 854 66

B. The Public Interest 1010

C. CEQA 1313

D. Failure to Obtain Prior Approval 1414

V. Miscellaneous Procedural Matters 1919

VI. Comments on Draft Decision 1919

VII. Assignment of Proceeding 1919

ORDER 2323

OPINION

I. Summary

We ordered Wild Goose Storage, Inc. (Wild Goose) to file this Application when we issued Decision (D.) 02-07-036, which amended Wild Goose's certificate of public convenience and necessity (CPCN) and authorized Wild Goose to construct and operate an expansion to its existing natural gas storage facility. In today's decision we determine that the holding company merger involving Wild Goose's original, ultimate parent has resulted in an indirect change of control over Wild Goose. Because the merger was finalized in Canada before this Application was filed, we approve the indirect change of control nunc pro tunc, since review of all of the circumstances indicates that, on balance, it is in the public interest to do so. However, as prescribed by §§ 2107 and 2108, we levy a $51,500 penalty against Wild Goose for a continuing violation of § 854(a).¹ We suspend one half of the percentage, or $25,750, after considering mitigating factors which suggest that the unsuspended $25,750 penalty achieves an equitable balance between the objectives of effective deterrence and avoidance of excess penalties.