ALJ/JRD/sid Mailed 4/5/2004

Decision 04-04-015 April 1, 2004

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of SOUTHERN CALIFORNIA GAS COMPANY In Compliance with Resolution G-3334 For a System of Firm, Tradable Receipt Point Capacity Rights and Related Provisions. (U 904 G)

Application 03-06-040 (Filed June 30, 2003)

(See Appendix A for a list of appearances.)

OPINION IMPLEMENTING DECISION 01-12-018

TABLE OF CONTENTS

Title Page

OPINION IMPLEMENTING DECISION 01-12-018 2

I. Summary 2

II. Background 2

III. Discussion 5

A. Issues 6

1. Storage Service Issues 6

a) Timing of Implementation for Storage Services 6

b) Schedule G-PAL 8

c) Variable Charges for Storage Services 8

2. Information Disclosure Issues 10

a) Negotiated Storage Contracts 10

(1) Schedules G-BSS and G-LTS 10

(2) Disclosure of Price Information 11

b) Storage Transactions in the Secondary Market 13

c) Tariffed Rate Storage Contracts 15

3. Tariff Schedule G-BR 15

a) Set-Aside Rights 15

b) ExxonMobil Request for Set-Aside Rights on the
North Coastal System 17

c) Market Concentration Limits 19

d) Open Season Bidding Rights 21

e) Seasonal Usage 24

f) Disclosure of Terms for Set-Aside and Open Season Capacity 26

g) Long-Term Firm Contracts 27

h) Long-Term Interruptible Contracts 29

i) Contract Determination 31

j) Credit Payments for Backbone Capacity 32

4. Tariff Schedule G-IMB, Rule 23 and Rule 40 34

a) 2.44% In-Kind Fuel Charge 34

b) Involuntary Diversion of Noncore Supplies 40

c) Involuntary Supply Diversion and Backbone Reservation Charges 43

d) Involuntary Diversion Credit and Force Majeure 46

e) Notification to End-Use Customers of an Imminent Supply Diversion 48

5. SoCalGas' November 24, 2003 Motion to Strike 49

6. Petition to Modify 50

a) Key Issues Have Been Addressed 51

b) Changes that Affect the Envisioned Use of
Receipt Point Capacity 52

c) Price Volatility 54

d) Discussion 55

IV. Comments on Proposed Decision 57

A. PG&E 57

B. El Paso Natural Gas Company and Mojave Pipeline Company 57

C. Watson Cogeneration Company and Calpine Corporation 58

D. SoCalGas 59

1. Implementation Date 59

2. 2.44% In-Kind Fuel Charge 59

3. Set-Aside Rights on North Coastal System For California Gas Producers 60

4. Petition to Modify 61

E. SCGC 62

1. Timing of Storage Services 62

2. Variable Charges for Storage Services 62

3. Seasonal Bids 63

4. Credit Payments for Backbone Capacity 63

5. Pooling Schedule G-POOL 63

6. Petition to Modify 63

F. Coral 63

G. Indicated Producers 65

1. California Producer Set-Asides 65

2. Rights of Long-Term Contract Holders 65

3. Petition to Modify 67

H. ExxonMobil 68

I. Edison 68

J. Department of General Services 69

V. Assignment of Proceeding 70

Findings of Fact 70

Conclusions of Law 75

ORDER 80

APPENDIX A - List of Appearances

APPENDIX B - Tariffs and Rules

OPINION IMPLEMENTING DECISION 01-12-018

I. Summary

This decision adopts tariffs that implement Decision (D.) 01-12-018.

In D.01-12-018, the Commission adopted a comprehensive settlement agreement (CSA) that modified the market and regulatory framework for regulating the transportation and storage of natural gas on Southern California Gas Company's (SoCalGas) system. This decision does not establish new polices and does not modify either the CSA or D.01-12-018. However, we stay this order pending the issuance of a decision in Phase I of Order Instituting Rulemaking 04-01-025.