2. Procedural History

The Commission approved the website's sale to Excelergy on June 8, 2000, but set up a second phase of the proceeding to consider penalizing SoCalGas for continuing to maintain an electricity platform on the site after issuance of a decision on the issue. In its approval of the website sale, the Commission voiced its concern that SoCalGas had violated an earlier Commission decision, D.99-02-059, which disallowed use of the website for electric programs without Commission approval:

There is no question that SoCalGas should have complied with the Affiliate Transaction rules in expanding the website beyond core gas aggregation services. In D.99-02-059, we stated that,

This decision only addresses the use of this website to support the core aggregation program. If SoCalGas seeks to provide other services on the website, it must first file an [a]dvice [l]etter pursuant to Rule VII.E. of the [A]ffiliate [T]ransaction rules.

While SoCalGas sought modification of this portion of D.99-02-059, we ruled that it abandoned that motion when it filed this Application to sell the site. Likewise, while it attempted to comply with D.99-02-059 by filing the ordered [a]dvice [l]etter, the Commission rejected the [a]dvice [l]etter because SoCalGas had not met D.99-02-059's requirement that SoCalGas file the letter before it modified the website, rather than after the fact.

Thus, while it may be true that SoCalGas attempted to comply with our rules, it does not appear to have accomplished compliance. This raises the issue of whether it is appropriate to allow SoCalGas' shareholders potential gains from the Energy Marketplace sale, or whether penalties would be appropriate. Therefore, we approve the sale and accounting treatment here, but will conduct a second phase of the proceeding to determine whether SoCalGas violated the Affiliate Transaction rules, and, if so, whether it should suffer penalties.²

The assigned Administrative Law Judge (ALJ) initiated the penalty phase of this proceeding by ruling dated July 20, 2000 (Second Phase Ruling). That ruling gave SoCalGas notice of the issues to be decided in the second phase, as follows:

A. Whether, before "seek[ing] to provide other services on the website, [SoCalGas] . . . first file[d] an [a]dvice [l]etter pursuant to Rule VII.E. of the [A]ffiliate [T]ransaction rules," as ordered in Decision (D.) 99-02-059.

B. If SoCalGas did not meet the condition in (A), why it did not.

C. If SoCalGas contends it was not required to meet the condition in (A) because the Commission issued D.99-02-059 after SoCalGas had already begun "provid[ing] other services on the website," why SoCalGas could not have ceased providing those other services until the Commission approved such provision.

D. Whether it is appropriate for a party to disregard a Commission order if the conduct ordered should have happened in the past.

E. Why SoCalGas did not persist in attempting to gain approval "to provide other services on the website" after the Energy Division rejected SoCalGas' [a]dvice [l]etter seeking such approval.

F. Whether SoCalGas should be excused from meeting the condition in (A) because it has sold the Energy Marketplace website.

G. Whether SoCalGas should have contested the Commission's draft decision dismissing SoCalGas' Petition for Modification of D.99-02-059 (Petition). SoCalGas' Petition had sought elimination of the requirement that SoCalGas gain Commission approval before expanding the website beyond core gas aggregation services.

H. If it did not meet the condition in (A), whether SoCalGas should be penalized for violating the Commission's order and its Affiliate Transaction rules. Pub. Util. Code §§ 701, 798, 2107; D.98-12-075, 1998 Cal. PUC Lexis 1016.

I. If penalties are appropriate, the nature and amount of such penalties.

The Second Phase Ruling also gave SoCalGas an opportunity to seek a hearing on the penalty phase issue, which SoCalGas accepted. On August 29, 2000, the ALJ held a prehearing conference to discuss hearing procedure, and after some rescheduling, held the hearing on December 13, 2000. SoCalGas submitted prehearing testimony, and presented the testimony of three witnesses at the hearing. The ALJ admitted Exhibits A-F and 1, 2 and 4, and questioned the witnesses.³ At the request of the ALJ, SoCalGas submitted late-filed Exhibit 3, containing financial information about SoCalGas, on December 19, 2000. The ALJ provided that Exhibit 3 would be in evidence on the date SoCalGas submitted it; thus, Exhibit 3 is now in evidence. After the hearing, on January 12, 2001, SoCalGas filed its Post-Hearing Brief, and the matter was deemed submitted at that time.