I. CEQA Motion

RACE's October 8, 2004 motion is virtually identical to its August 18, 2004 motion, except for the references to the "Rulemaking in its entirety," the "Phase I Decision," and the "Phase II Proposed Decision" or "Phase II Draft Decision." RACE's October 8, 2004 motion seeks a determination that CEQA applies to the entire Rulemaking, to the Phase I decision, and to the Phase II proposed or draft decision. RACE's August 18, 2004 motion sought a determination that CEQA applies to the "Phase I Draft Decision and the Rulemaking as [a] whole. (August 18, 2004 Motion, p. 2.)

In the September 3, 2004 ACR, which we incorporate herein by reference, we denied "RACE's motion for a determination that CEQA applies to the Phase I decision, or to this proceeding...." (September 3, 2004 ACR, pp. 5-6.) The ACR stated in pertinent part:

"RACE's motion contains rhetoric regarding the impact of ensuring reliable long-term supplies of gas to California, but sidesteps the fact that CEQA requires that the agency action must involve a project. Contrary to what RACE would lead one to believe, the Phase I decision does not authorize the construction of any LNG facility, pipeline or backbone transmission. ...

"The policy directives in the Phase I decision merely allow interconnections to the existing gas utilities' transmission systems. The decision does not authorize the construction of any LNG facilities or the pipelines needed to connect the LNG facilities to the interconnections.

"If one looks closely at the proposed LNG projects, it is clear that the environmental concerns that RACE has raised are being addressed in other forums. For example, the Baja California LNG projects are being handled through the regulatory processes of Mexico, the proposed facilities offshore of California are subject to federal review, and the Port of Long Beach has initiated an environmental review of the proposed LNG project in Long Beach.

"Unlike the cases cited by RACE, the decision does not authorize any action which constitutes an essential step that will lead to a physical or indirect change to the environment. [Citation omitted.] Rather, the decision is only addressing the manner in which the gas utilities will allow potential interconnections to occur. As SDG&E/SoCalGas point out at page 5 of their [August 30, 2004] response, the `causal link' between the decision and any future LNG or pipeline facility construction is missing. Also, the potential interconnections with LNG facilities may or may not materialize, which does not fulfill the `foreseeable' impact requirement that a project must meet before CEQA applies." (September 3, 2004 ACR, pp. 4-5.)

As noted in the "Phase II Scoping Memo and Ruling" section above, the "Phase II issues ultimately involve policy determinations." Phase II of this proceeding does not involve the approval of specific projects. Matters which address policy and procedures are exempt from the definition of a "project" under CEQA. (Tit. 14 Cal. Code of Regulations, § 15378(b)(2).) Accordingly, CEQA does not apply to the Phase II issues.

RACE has not raised any new arguments in its October 8, 2004 motion as to why CEQA should apply to the Phase I decision, to any of the Phase II issues, or to the Rulemaking as a whole. For the reasons set forth in the September 3, 2004 ACR, and because Phase II of this proceeding does not involve the approval of any specific project, RACE's October 8, 2004 motion for a determination that CEQA applies to the Phase I decision, to a Phase II draft or proposed decision, or to this Rulemaking, is denied.

Therefore, IT IS RULED that:

1. The scope of issues for Phase II of this proceeding, and the schedule for resolving these issues, is set forth in the body of this scoping memo and ruling.

2. A workshop notice to address whether a standardized operational balancing agreement should be adopted will be issued in the near future.

3. A prehearing conference (PHC) to discuss the evidentiary hearings (EHs) for the Phase II issues shall be held on Wednesday, March 23, 2005, at 10:30 a.m., Commission Court Room, State Office Building, 505 Van Ness Avenue, San Francisco, CA 94102.

a. Any party interested in having EHs on specific Phase II issues identified in this ruling shall file with the Commission's Docket Office a PHC statement identifying which issues the party believes hearings are needed, which issues do not require a hearing, and a proposed hearing schedule.

b. The PHC statement shall be filed on or before March 14, 2005, and a copy of the PHC statement shall be served on the service list to this proceeding using the procedure described in this ruling.

4. Phase II of this proceeding is categorized as ratesetting.

5. Discovery disputes shall use the procedures set forth in Resolution ALJ-164.

6. The service list that was used in Phase I, and which may be updated by the Commission's Process Office from time to time, shall continue to serve as the service list for Phase II of this proceeding.

7. The October 8, 2004 motion by the Ratepayers for Affordable Clean Energy for a determination of the applicability of the California Environmental Quality Act to the Phase I decision, to a Phase II draft or proposed decision, or to this rulemaking, is denied.

Dated February 28, 2005, at San Francisco, California.

		/s/ MICHAEL R. PEEVEY
		Michael R. Peevey Assigned Commissioner

		/s/ SUSAN P. KENNEDY
		Susan P. Kennedy Assigned Commissioner

CERTIFICATE OF SERVICE

I certify that I have by mail, and by electronic mail to the parties to which an electronic mail address has been provided, this day served a true copy of the original attached Scoping Memo and Ruling of the Assigned Commissioners for Phase II, and Notice of Prehearing Conference on all parties of record in this proceeding or their attorneys of record.

Dated February 28, 2005, at San Francisco, California.

/s/ FANNIE SID

Fannie Sid

NOTICE

Parties should notify the Process Office, Public Utilities Commission, 505 Van Ness Avenue, Room 2000, San Francisco, CA 94102, of any change of address to insure that they continue to receive documents. You must indicate the proceeding number on the service list on which your name appears.

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The Commission's policy is to schedule hearings (meetings, workshops, etc.) in locations that are accessible to people with disabilities. To verify that a particular location is accessible, call: Calendar Clerk (415) 703-1203.

If specialized accommodations for the disabled are needed, e.g., sign language interpreters, those making the arrangements must call the Public Advisor at (415) 703-2074 or TTY# 1-866-836-7825 or (415) 703-5282 at least three working days in advance of the event.