FYI. Thought you might be interested.  Perhaps next week we can do
coffee.

>  -----Original Message-----
> From:  Cherry, Brian
> Sent: Tuesday, November 28, 2000 6:43 PM
> To: Andrew Niven; Benjamin Campbell; Dan McLafferty; Dan Thomas; David
> Anderson; Dede Hapner; Dennis Gee; Donald Petersen; Frank Lindh; G
> Jefferson; Geoffrey Bellenger; George Clavier; J Reidenbach; Jerry Miller;
> John Armato; John Clarke; Kevin Ernst; Kirk Johnson; Les Buchner; Les
> Guliasi; Lisa Lieu; Lise Jordan; Mark Huffman; Michael Katz; Neha Patel;
> Patrick Golden; Paul Sivley; Randall Litteneker; Ray Williams; Richard
> Hall; Rodney Boschee; Sandra Burns; Sandy Dickinson; Shaun Halverson;
> Shelly Malekos; Stuart Tartaglia; Todd Arnett; Trista Berkovitz
> Subject: Sempra Gas Transmission OII PHC
>
> Earlier today, a PHC was held in the Sempra Gas Transmission OII
> (I.00-11-002).  ALJ Bushy and Assigned Commissioner Bilas presided over
> the hearing and 40 appearances were entered into the record.  The OII is
> focused on Sempra, SoCalGas, and SDG&E's gas transmission planning
> practices in general and the recent curtailments of gas deliveries in
> SDG&E's service territory.
>
> Parties argued for segmenting the proceeding into two phases: Phase 1,
> which would deal with SDG&E's Rule 14 curtailment priority and is expected
> to be resolved through a settlement in the near term (by January 2001)
> with SDG&E's electric generation customers, and Phase 2, which will deal
> with longer-term issues of reliability and system infrastructure planning
> and development.
>
> As for the Phase 1 issues, Duke, Dynegy and SDG&E are to reply to
> discovery requests by December 15 and present a status report or
> resolution of Rule 14 matters to the ALJ on or before January 19.  In an
> effort at compromise, PG&E NEG (Otay Mesa)  proposed a "Double Pro Rata
> Gas Curtailment" plan for parties to consider.  Under this plan, EG's
> (excepting cogenerators) would be curtailed on a pro rata basis within the
> EG class based upon scheduled EG demand.  This would be classified as a
> Step 1 allocation.  In the event this Step 1 allocation to an individual
> EG is such that it is unable to satisfy its RMR obligations under the gas
> allocated under Step 1 (assuming it has been called upon by the ISO
> pursuant to the terms of the RMR contract),  then an additional quantity
> of gas will be made available to that plant on a pro rata basis from the
> remaining EG plants.  PG&E NEG was the only one to offer a formalized
> proposal and I have copies of the proposal for those who are interested.
>
> The Phase II issues look to be much more contentious and are likely to
> involve significant discovery issues.  The parties pointed out to the ALJ
> that comments filed by SDG&E and SoCalGas on the OII and in
> representations made in the courtroom today failed to include Sempra or
> its pipeline affiliate as a respondent.  They also noted that many of the
> issues they were concerned with dealt specifically with communications
> between Sempra and its affiliates.  The ALJ noted that "good form required
> a respondent to cooperate and appear" . Sempra argued that SDG&E and
> SoCalGas were the only entities owning and operating gas transmission and
> distribution facilities in California,  not the parent or the pipeline
> company.  ALJ Bushy ended this discussion quickly and noted that Sempra
> was a respondent and should enter an appearance and the Sempra attorney
> reluctantly agreed.
>
> More important were the comments of Commissioner Bilas.  Bilas noted that
> the recent gas curtailments in southern California, combined with the
> electricity crisis and high winter gas prices, were creating headaches for
> everyone.  He stated that parties need to come to grips with the dynamic
> political climate and needed to find, "..legitimate economic
> solutions...not let this become a political football".   This certainly
> appears to be consistent with his current thinking as evidenced by his
> caution in moving forward with the southern California Comprehensive
> Settlement as stated in the CSA PD.
>
> Parties are requested to file PHC statements for the second PHC, currently
> scheduled for sometime the week of the January 22.  The PHC statements
> need to include an issue discussion and a proposed schedule.  ALJ Bushy
> ordered discovery to commence immediately.