"PG&E may distinguish between parties in offering negotiated rates by evaluating differences in circumstances and conditions, including, but not limited to, differences occurring upstream of, downstream of, or at, the Customer's location, and differences affecting either cost of service to the Customer or the Customer's market alternatives. Negotiations with Customers under this rate schedule will be conducted without undue preference or undue discrimination to the Customer or to any third party." (See 73 CPUC2d at 815; PG&E Schedule G-NFT.)


"Whenever PG&E offers a rate under this rate schedule which is below the tariff rate cap for Schedule G-AFT on its Redwood to On-System path, PG&E shall contemporaneously offer a commensurate discount (i.e., the same penny for penny discount up to the specified quantity and up to the specified term in any discounted contract with any Redwood to On-System shipper) to all prospective shippers for firm service from the tariffed rate cap for schedule G-AFT for the Baja to On-System and Silverado to On-System paths, to the extent capacity is available up to an equivalent volume in aggregate to the discount offered for Redwood to On-System service." (Ex. 1 at 5-12.)

15 In the event this occurs, the firm service is rationed on a pro rata basis, regardless of the owner of the contract. 16 The tariff language for the commensurate discount rule was approved in Resolution G-3288, which provides: "Whenever PG&E offers a rate under this rate schedule which is below the tariff rate cap for Schedule G-NFT on its Redwood to On-System path, PG&E shall contemporaneously offer a commensurate discount (i.e., the same penny for penny discount up to the specified quantity and up to the specified term in any discounted contract with any Redwood to On-System shipper) to all shippers for firm service from the tariffed rate cap for schedule G-NFT for the Baja to On-System and Silverado to On-System paths, to the extent capacity is available." (Schedule G-NFT.) 17 The proposed changes are shown in bold. 18 PG&E contends that these third-party storage facilities could be either the storage field or the pipeline that connects these facilities to PG&E's transmission system. 19 PG&E believes that the Commission should require the third party storage provider to make a monthly report of all transactions that result in a change of title of gas volumes that move from or to the storage accounts of customers and producers that delivered gas via the on-system backbone connection to PG&E and the storage accounts of the interconnections to the private pipeline or gas gathering pipeline. The third-party storage provider should also report all transactions where the gas title changes between the storage accounts of the varying interconnects to the third party storage provider. 20 Cost allocation issues regarding the backbone are discussed in the Cost Allocation and Rate Design section. 21 PG&E defines "expected usage" as a shipper's highest actual usage in the past 12 months.

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