Scope of Issues
Interested parties were provided an opportunity to comment in their prehearing conference statements and at the prehearing conference on whether the March 24, 2005 preliminary list of issues should be included in the scoping memo, and to identify other issues that should be included in the scoping memo. Based on the preliminary list and the parties' comments, the following scope of issues will be addressed in this proceeding:
System Integration Issues
· Should the gas transmission systems of SDG&E and SoCalGas be integrated on an economic basis, including the transmission component of the gas transportation rates of SDG&E and SoCalGas?
· Does the system integration proposal, including the proposed integration of the gas transmission rates of SDG&E and SoCalGas, conflict in any way with D.01-09-056 and D.98-03-073 regarding the treatment of SDG&E and SoCalGas as separate regulated utilities? (See 79 CPUC2d at pp. 354-355, 429, FOF 146; D.01-09-056, p. 6.)
· Are there any potential capacity constraints along the Rainbow Corridor (Lines 6900, 1027 and 1028), and what impact will this have on the system integration proposal? (See Resolution G-3377.)
· Should the Rainbow Corridor be treated as a local transmission line, backbone transmission line, or as a receipt point, and what impact will this have on the system integration proposal and the ability to move regasified liquefied natural gas (LNG) from Otay Mesa? (See Resolution G-3377.)
Firm Access Rights Issues
· Should the firm access rights proposal of SDG&E and SoCalGas be adopted, or should the existing "windowing" system of gas nominations and transmission be retained, or should alternative transmission access proposals be considered?
· How does the firm access rights proposal differ from a path-specific system, and what are the advantages and disadvantages of each system as it relates to the SDG&E and SoCalGas systems?
· Under the firm access rights proposal, what transmission zones will gas suppliers (east or north of California, from California or LNG suppliers) need to secure rights to in order to transport their gas to customers of SoCalGas and SDG&E? (Testimony should describe and/or provide transmission zone scenarios, receipt point capacities, flow diagrams, and potential capacity constraints.)
· Do the proposed transmission zones provide an advantage to LNG supplies that might enter through Otay Mesa using the proposed Southern Transmission Zone?
· Do the proposed transmission zones discriminate against California natural gas producers?
· Should SDG&E and SoCalGas bear some or all of the risk for gas transmission revenues?
· Should backbone transmission costs be unbundled from local transmission and distribution costs, as was done in the Comprehensive Settlement Agreement?
· Should SDG&E and SoCalGas be authorized to use an expedited application process to seek Commission approval of a project requesting new or expanded receipt point access?
· Are there any potential capacity constraints along the Rainbow Corridor (Lines 6900, 1027 and 1028), and what impact will this have on the firm access rights proposal? (See Resolution G-3377.)
· Should the Rainbow Corridor be treated as a local transmission line, backbone transmission line, or as a receipt point, and what impact will this have on the firm access rights proposal and the ability to move regasified LNG from Otay Mesa? (See Resolution G-3377.)
· Should the peaking rate be eliminated?
· If the Commission adopts a system of firm access rights in this proceeding, will D.01-12-018 and D.04-04-015 be rendered moot?
· If the Commission adopts a system of firm access rights in this proceeding, when should SDG&E and SoCalGas be required to file their respective BCAPs? (See D.04-05-039.)
Off-System Delivery Issues
· Should the Commission adopt the proposal to establish off-system transportation services to PG&E?2
· Where should the off-system connection from SoCalGas to PG&E be located?
· Should SDG&E and SoCalGas be authorized to use an expedited application process to seek approval of a project for new, facility-based off-system services, and to determine whether the costs should be rolled-in or on an incremental pricing basis?
As discussed below, this proceeding will be addressed in two phases. The first phase will address the system integration issues, as described above. The second phase will address the firm access rights issues and off-system issues, as described above.
The following issues will not be considered in this proceeding:
· Gas balancing, diversion, and curtailment procedures.3
· Gas storage and hub transactions.4
· Off-system delivery to pipelines other than PG&E.
Due to the narrowing of issues that will be considered in this proceeding, it may be appropriate before hearings begin for SoCalGas and SDG&E to withdraw, strike, or revise certain portions of their previously submitted prepared testimony.
As mentioned at the prehearing conference, the system capacity of SoCalGas and SDG&E is being examined in Phase II of R.04-01-025 as part of the infrastructure adequacy issues. (See May 11, 2005 Assigned Commissioners' Ruling and April 21, 2005 Assigned Commissioners' Ruling in R.04-01-025.) System capacity, or infrastructure adequacy, is an issue that is related to the firm access rights proposal in this proceeding. Evidentiary hearings on the infrastructure adequacy issues in R.04-01-025 are scheduled for August 22-26, 2005. Parties in this proceeding who are interested in the system capacity of SoCalGas should monitor or participate in the Phase II infrastructure adequacy hearings in R.04-01-025. Due to this overlap regarding system capacity, the record being developed in R.04-01-025 on infrastructure adequacy may be relevant and useful for examining the firm access rights issues in Phase II of this proceeding.
2 Based on Conclusion of Law 17 and the reference at page 74 in D.04-09-022 that "SoCalGas' proposal for off-system deliveries should be limited to PG&E," the scope of this proceeding will only address the off-system proposal as it applies to PG&E.
3 These issues may be more appropriate in the BCAP or in a separate application.
4 Although proposals to change the current gas storage operations of SoCalGas will not be considered in this proceeding, parties may raise the differences in the risk-reward structure between gas storage and gas transmission.
