V. Assignment of Proceeding
Geoffrey F. Brown is the Assigned Commissioner and Joseph R. DeUlloa is the assigned Administrative Law Judge in this proceeding.
1. In D.01-12-018, the Commission adopted a CSA that modified the market and regulatory framework for regulating the transportation and storage of natural gas on SoCalGas' system.
2. This decision does not establish new polices and does not modify either the CSA or D.01-12-018.
3. This decision adopts tariffs that implement D.01-12-018.
4. The analyses of SCGC and Edison concerning the timetable for implementing storage services are silent on the fact that approximately two years and seven months remain before the CSA expires on August 31, 2006.
5. SCGC's proposal for phasing-in storage services does not address the impact from the delay that has occurred in implementing the CSA.
6. SoCalGas' proposal for implementing storage services follows the literal language of Section 2.3.3 of the CSA.
7. SGCG's proposal for implementing storage services places greater emphasis on transitioning rather than achieving the goal of placing SoCalGas at 100% risk/reward.
8. SoCalGas' proposed tariffs for implementing storage services shield ratepayers from risk, whereas under SCGC's approach ratepayers are exposed to revenue shortfall risk for two years.
9. The proposal of SoCalGas to withhold price information for negotiated storage contracts may have a detrimental effect in promoting an efficient marketplace.
10. Disclosure of transaction-specific details about storage contracts is basic and fundamental to an efficient market.
11. The CSA grants a set-aside of 73 MMcf/d of North Coastal capacity for core customers.
12. The CSA does not grant ExxonMobil set-aside rights of 68 MMcf/d.
13. The purpose of the market concentration limit imposed by the CSA is to prevent market power abuse.
14. Edison's request for an exemption from market concentration limits may detrimentally affect other customers by decreasing the amount of backbone capacity that is available to other customers at desirable receipt points.
15. Only existing noncore customers are entitled to bid for backbone capacity in the open season, and only to the extent of their historical load.
16. Edison's proposal for additional bidding rights will decrease the amount of backbone capacity that is available to other customers at desirable receipt points.
17. SCGC did not establish that only bids for capacity on an annual basis would be successful to the exclusion of bids for seasonal capacity.
18. SCGC did not present an alternative proposal addressing seasonal usage in its testimony.
19. SCGC's proposal to require SoCalGas to disclose information about set-aside capacity and contracts awarded through the open season would modify the CSA by imposing new disclosure requirements not contained in the CSA.
20. The Oxnard 3 contracts have not been subject to examination in this proceeding.
21. Different levels of service currently exist on SoCalGas' gas transportation system.
22. Under the current bundled environment for gas transportation service, customers have equal access into SoCalGas' system, but pay for varying levels of certainty, firm and interruptible, for their deliveries of gas.
23. This proceeding was not intended to resolve contract specific issues.
24. At hearing, IP had ample opportunity to explore how firm versus interruptible contracts would be treated.
25. SCGC has not demonstrated how SoCalGas' proposal to credit payments for backbone capacity against monthly bills for discounted long-term contracts prejudices ratepayers or exacerbates shortfalls recorded in the NFCA.
26. SoCalGas' conduct subsequent to the adoption of the CSA reflected an intent that the CSA did not authorize a 2.44% in-kind fuel charge for balancing.
27. SoCalGas' own workshop documents and proposed tariffs in discussions with other parties after the CSA was implemented manifest an intent that indicates that the CSA did not authorize 2.44% in-kind fuel charge for balancing.
28. Section 1.5.4 of the CSA clearly envisioned the possibility that involuntary supply diversions might occur.
29. No provision exists in the CSA that relieves customers of the backbone reservation charges in a supply diversion event.
30. A supply diversion should only occur when operational conditions prevent SoCalGas from serving its core customers. Operational conditions may include gas supply, pipeline and storage conditions that can arise as a result of force majeure.
31. Noncore customers should receive the Involuntary Diversion Credit (IDC) whenever their gas is involuntarily diverted.
32. Creating an exception for force majeure may render the IDC largely worthless.
33. Balancing entities are in a better position than SoCalGas to know when their customers' supplies are being diverted.
34. Balancing entities should be responsible for meeting the demands of end-use customers on a daily basis regardless of whether a diversion is occurring.
35. PG&E did not conduct any cross-examination or present any testimony in support of its position that Schedule G-BR is unduly discriminatory.
36. PG&E did not conduct any cross-examination or present any testimony in support of its position that no lawful or rational basis exists for excluding the Kramer Junction interconnect as a secondary receipt point for the North Needles receipt point and North Needles (expansion) Receipt Point.
37. PG&E did not conduct any cross-examination or present any testimony in support of its position that excluding the Kramer Junction interconnect as a secondary receipt point for the North Needles receipt point and North Needles (expansion) Receipt Point would result in undue discrimination against gas supplies from the Kern River Pipeline into SoCalGas' system as compared to gas flowing from other pipelines in the Southwest.
38. SoCalGas withdrew its proposal to create multiple receipt point pools and SoCalGas proposes to create only one pool on its system: the citygate pool.
39. On October 23, 2003, SCGC, IP, Coral, Cabrillo I, LLC, Cabrillo II, LLC, El Segundo Power, LLC, Long Beach Generation, LLC, DGS, and TURN (Joint Parties) filed a petition to modify D.01-12-018 (petition).
40. The Petition of Joint Parties to vacate D.01-12-018 does not demonstrate that the CSA is no longer responsive to the circumstances existing on the SoCalGas system.
41. The Petition of Joint Parties to vacate D.01-12-018 does not demonstrate that the passage of time has changed or undermined the expected benefits of the CSA.
42. The Petition of Joint Parties to vacate D.01-12-018 does not demonstrate that system expansions erode the CSA's benefits to California consumers.
43. The Petition of Joint Parties to vacate D.01-12-018 does not demonstrate that implementation of the CSA will add volatility in the delivered cost of gas for California consumers.
44. The Petition of Joint Parties to vacate D.01-12-018 lacks meaningful explanation of how the changes cited would justify abandoning the CSA and vacating D.01-12-018.
45. Granting the Petition of Joint Parties to vacate D.01-12-018 would perpetuate the current uncertainty concerning the natural gas market structure for SoCalGas.
46. Implementation of the CSA will allow the Commission to gain valuable experience prior to accommodating Liquified Natural Gas (LNG) suppliers.
1. Given the delay in implementation, the approach proffered by SoCalGas for implementing storage services is the most consistent with the intent of the CSA.
2. The CSA reflects an intent to place SoCalGas at 100% risk/reward with regards to rates and revenues for storage services.
3. SoCalGas' schedule for implementing storage services should be adopted.
4. SCGC's implementation proposal for schedule G-PAL should be denied.
5. Section 2.1.3.4 of the CSA authorizes SoCalGas to impose variable charges for actual usage in the provision of storage services during Open Season.
6. Section 2.1.3.5 of the CSA does not authorize SoCalGas to impose variable charges for actual usage in the provision of storage services for capacity not committed during Open Season.
7. Disclosure of transaction-specific details about storage contracts is basic and fundamental to an efficient market.
8. The CSA favors disclosure of transactional information for storage contracts.
9. Information about storage contracts under closed schedules G-BSS and G-LTS should be disclosed.
10. Section 6.2.3.2 of the CSA requires SoCalGas to post information about price, quantity and term of storage contracts.
11. D.01-12-018 did not modify the disclosure requirements of Section 6.3.3.4 of the CSA regarding storage transactions in the secondary market.
12. Section 6.3.3.4 of the CSA requires SoCalGas to publish the amount, price, and term of secondary storage transactions while keeping the names of parties confidential, absent approval of publication of names by the involved parties for storage transactions in the secondary market.
13. The CSA does not require SoCalGas to post information about amount, price, term and names for storage services at tariffed rates under Schedules G-CGS or G-PAC.
14. The CSA provides no exemption for Edison to receive set-aside rights.
15. ExxonMobil's request for a set-aside is not supported by the CSA.
16. ExxonMobil's request for a set-aside should be denied.
17. Edison's request for an exemption from the 30% market concentration limit is unsupported and inconsistent with the CSA.
18. The CSA does not provide for bidding rights based on forecasted usage.
19. To the extent Edison is unable to procure sufficient capacity through set-aside rights to meet its needs, Edison may acquire capacity in the secondary market to meet demand.
20. SoCalGas' proposal in tariff Schedule G-BR, Sheet 11, to define bidding rights based on the use of forecasted demand is inconsistent with the CSA.
21. Edison is not entitled to additional bidding rights based on forecasted demand.
22. SoCalGas proposed Schedule G-BR should be modified so that bidding rights are established based on historical consumption and not on forecasted usage.
23. The "Bid and Evaluation" in Schedule G-BR should be modified to include a reference to "seasonal bids" to clarify that a seasonal bid may extend beyond one month and represent several contiguous months.
24. SCGC's uncontested proposal to delete the word "substantially" from SoCalGas' proposed Schedule G-BR in Subsection 2 of Special Condition 29 on Sheet 11 is reasonable as it clarifies the tariff and should be adopted.
25. SoCalGas' Proposed Schedule G-BR Special Condition 29 fairly balances seasonal and annual usage by permitting both types of customers to participate in the open season.
26. SoCalGas' Proposed Schedule G-BR Special Condition 29 is consistent with Section 1.1.3.6.1 of the CSA.
27. Neither the CSA nor D.01-12-018 requires SoCalGas to disclose information about set-aside capacity and contracts awarded through the open season.
28. SoCalGas' Proposed Schedule G-BR Special Condition 29 fairly evaluates bids during open season.
29. SCGC's proposal to require SoCalGas to disclose information about set-aside capacity and contracts awarded through the open season should be rejected as unsupported by either the CSA or D.01-12-018 and also as outside the scope of this proceeding.
30. It is reasonable for SoCalGas to offer interruptible backbone rights to customers who currently receive interruptible delivery service under their long-term contracts.
31. SoCalGas should not implement Section 1.9 of the CSA in a manner that confers greater benefits than what was bargained for in the contracts subject to Section 1.9 of the CSA.
32. For contracts that provide the option to take service under SoCalGas' tariff rather than under their contracts, SoCalGas' proposal to allow such contract holders the ability to reduce their set-aside rights at Wheeler Ridge so that they can bid the difference in the open at any receipt point is reasonable.
33. SoCalGas should implement the CSA in a manner sufficient to prevent Oxnard 3 customers from losing the benefit of the bargain in the Oxnard 3 contracts.
34. Customers who currently pay for and receive interruptible service under their contracts are not entitled under the CSA to firm backbone rights.
35. Customers should not lose the benefit of the bargain contained in their interruptible long-term contracts.
36. SoCalGas should apply its tariffs in a manner that maintains the benefit of the bargain for interruptible long-term contract customers.
37. SoCalGas proposed treatment of holders of interruptible long-term contracts is reasonable and consistent with the CSA.
38. SoCalGas' proposal to credit payments for backbone capacity against monthly bills on a unit basis to the extent of actual usage for discounted long-term contracts is reasonable.
39. Neither the CSA nor D.01-12-018 authorizes SoCalGas to impose a 2.44% in-kind fuel charge for balancing.
40. The cost of default balancing should not be adversely affected by the CSA.
41. Supply diversions should not occur for solely economic reasons.
42. SoCalGas should use all reasonable market opportunities, including buying on the open market to alleviate a potential supply diversion.
43. SoCalGas' proposed language in Rule 23 for imposing involuntary diversions of noncore gas supplies is reasonable and should be adopted.
44. A noncore customer's duty to pay backbone reservation charges is not suspended during a supply diversion event.
45. Coral's proposal to suspend the payment of backbone reservation charges during a supply diversion event should be rejected.
46. It is unreasonable to eliminate the IDC exemption for force majeure events.
47. SoCalGas' request to withdraw its proposal to eliminate the IDC exemption for force majeure events should be accepted.
48. Neither the CSA nor D.01-12-018 impose an affirmative requirement on SoCalGas to notify end-use customers of an involuntary supply diversion.
49. Neither the CSA nor D.01-12-018 prevent SoCalGas from voluntarily making best efforts to notify balancing entities and end-use customers of an involuntary supply diversion.
50. Neither the CSA nor D.01-12-018 require the imposition of a financial charge or economic penalty upon SoCalGas if it fails to provide notice to all balancing entities and noncore end-use customers of an involuntary supply diversion.
51. PG&E's proposal to aggregate receipt points in a manner not authorized either by the CSA or D.01-10-018 is outside the scope of this proceeding.
52. The motion of SoCalGas to strike PG&E's opening brief should be denied.
53. Joint Parties interim proposal for SoCalGas to continue to provide service under existing tariffs is unreasonable.
54. Joint Parties have not demonstrated that D.01-12-018 and Resolution G-3334 should be vacated.
55. The Petition of Joint Parties to vacate D.01-12-018 based on the recitation of changed circumstances without meaningful discussion and the postulation of volatility that may occur are insufficient grounds to vacate D.01-12-018, a decision adopted by the majority of the Commission.
56. The Petition of Joint Parties to vacate D.01-12-018 should be denied.
57. SoCalGas should make the tariffs changes contained in Appendix B.
IT IS ORDERED that:
1. SoCalGas shall file an advice letter within 10 days from the date of this decision that includes the tariffs filed in this proceeding on July 15, 2003, as modified by the tariff and rule language adopted in Appendix B. Unless suspended by the Energy Division, these tariffs and rules shall become effective the first day of the month at least three and one-half months after the effective date of this decision.
2. The motion of SoCalGas to strike Pacific Gas and Electric Company's opening brief is denied.
3. The Petition to modify Decision 01-12-018 is denied.
4. This proceeding is closed.
This order is effective today.
Dated , at San Francisco, California.
APPENDIX A
List of Appearances
Applicant: David J. Gilmore and Stacy Van Goor, Attorneys at Law,
and Leslie Katz, for San Diego Gas & Electric Company and Southern California Gas Company.
Interested Parties: Alcantar & Kahl, LLP, by Michael Alcantar, Attorney at
Law, for Cogeneration Association of California; Matthew V. Brady, Special Counsel, for the Department of General Services; Avis Clark, for Calpine Corporation; Goodin, MacBride, Squeri, Ritchie & Day, LLP, by Brian Cragg, Attorney at Law, for Dynegy, Duke Energy North American, Duke Energy Trading & Marketing; Goodin, MacBride, Squeri, Ritchie & Day, LLP, by Michael B. Day, Attorney at Law, for Kern River Gas Transmission Co., Questar Southern Trails Pipeline Co., and Wild Goose Storage, Inc.; Eric Eisenman, Director, Governmental Relations, for PG&E GT-NW/North Baja Pipeline; Ned Greenwood, for Questar Southern Trails Pipeline; Morrison & Foerster, LLP, by Peter Hanschen, Attorney at Law, for El Paso Natural Gas Company, Mojave Pipeline Company, and Agricultural Energy Consumers Association; Gloria M. Ing, Attorney at Law, for Southern California Edison Company; Alcantar & Kahl, LLP, Evelyn Kahl; Attorney at Law, for Indicated Producers; White & Case, LLP, by Joseph M. Karp, Attorney at Law, for California Cogeneration Council; Luce, Forward, Hamilton & Scripps, LLP, by John W. Leslie, Attorney at Law, for Coral Energy Resources, LP; Sutherland, Asbill & Brennan, by Keith McCrea, Attorney at Law, for California Manufacturers & Technology Association; Patrick G. McGuire, Crossborder Energy, for Watson Cogeneration Company; Davis, Wright, Tremaine, LLP, by Edward W. O'Neill, Attorney at Law, for Intergen North America, Inc.; Hanna and Morton, LLP, by Norman A. Pedersen, Attorney at Law, for Southern California Generation Coalition; Patrick J. Power, Attorney at Law, for City of Long Beach; Douglas W. Rasch, Attorney at Law, for Exxon Mobil Corporation; Michael Rochman, Attorney at Law, for California Utility Buyers JPA; and Elizabeth Wesby, for Midway Sunset Cogeneration Company.
Intervenors: Bridget Branigan, Attorney at Law, for Southwest Gas
Corporation; Marcel Hawiger, Staff Attorney, for The Utility Reform Network; Law Offices of Daniel W. Douglass, by Gregory Klatt, Attorney at Law, for Transwestern Pipeline Company; and Frank R. Lindh, Attorney at Law, for Pacific Gas and Electric Company.
Protestants: Bright and Brown, by Maureen J. Bright, Attorney at Law and
Hogan & Hartson, LLP, by Karollyn Newman, Attorney at Law, for Marathon Oil Company.
State Service: Darwin Farrar, Attorney at Law, and Jacqueline Greig, for the
Office of Ratepayer Advocates.
(END OF APPENDIX A)
