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CPUC Proposed Decision Emerges on Much-Delayed SoCalGas System Re-do

CPUC Proposed Decision Emerges on Much-Delayed SoCalGas System Re-do

Three years after the first state regulatory decision on Southern California Gas Co.'s comprehensive settlement on its transmission/storage unbundling, a state regulatory administrative law judge last Monday released a proposed decision aimed at implementing the basic provisions of the original settlement by April 1.

After a tumultuous three to five years, during which settlement parties balked at numerous implementation attempts, the judge proposes to close the case. The CPUC could consider the issue at its first regularly scheduled business meeting in February (Feb. 11), and the Sempra Energy gas-only utility would be cleared within 10 days of CPUC approval to file an advice letter with its new rates for April 1.

Issues left on the table are many, but the ALJ's attitude was to select the first of two options presented by SoCalGas, namely, to implement the original settlement, casting aside most modifications that had been sought. The ALJ denied a motion last October by marketers and consumer groups, including Coral Energy Marketing and TURN (The Utility Reform Network), to modify the SoCal restructuring of its system on the basis the market in Southern California has changed since the institution of the comprehensive settlement agreement (CSA).

The joint parties argued for modifications because of what they called "changes in intrastate delivery capabilities and core upstream commitments (that) have and will continue to alter the use of receipt point capacity as envisioned by the CSA. Specifically, (the joint parties) state that upstream pipelines have expanded capacity to serve California, and thus the need for capacity at various receipt points has changed."

In essence, the ALJ concluded that the benefits of implementing the long-delayed settlement for unbundling SoCal's transmission/storage system outweighed the arguments to abandon the deal and start over. Thus, the judge denied the request to vacate the Jan. 12, 2001 decision. The judge made clear he is not suggesting any new policies or modifying the comprehensive settlement; he simply adopts tariffs for the utility to implement.

Last summer, SoCalGas presented two options -- (1) what it call the "compliance case" of implementing the tariffs in the settlement, or (2) what it said was the "preferred case" of making recommended changes by various parties. Assigned CPUC Commissioner Geoffrey Brown, who had privately expressed concerns about rival California private-sector utilities trying to "sabotage" the settlement, issued what the CPUC calls a "scoping memo" in which he limited the case to consideration of the first option -- the compliance case.

Brown indicated that separately he would have the CPUC staff explore whether another proceeding in the future should address the proposed modifications to the CSA.

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