BEFORE THE PUBLIC UTILITIES COMMISSION



BEFORE THE PUBLIC UTILITIES COMMISSION

OF THE STATE OF CALIFORNIA

|PACIFIC GAS AND ELECTRIC COMPANY | |

|Complainant, | |

|v. | |

|CALPINE CORPORATION; CPN PIPELINE COMPANY; CALPINE ENERGY SERVICES, L. P., CALPINE |Case No. C.03-07-031 |

|NATURAL GAS COMPANY; LODI GAS STORAGE, LLC; AND DOES 1-10, | |

|Defendants. | |

| | |

| | |

| | |

| | |

| | |

Comments Of THE

california natuRal gas producers association

in support of motions to Dismiss PG&E’s Complaint,

Edward G. Poole

Anderson & Poole

601 California Street, Suite 1300

San Francisco, CA 94108

Telephone: 415-956-6413

Facsimile: 415-956-6416

Email: epoole@

Attorneys for the California Natural Gas Producers Association

September 11, 2003

I. Introduction

The California Natural Gas Producers Association (CNGPA) is an independent non-profit trade organization designed to address the specific needs of California’s natural gas producers and to create heightened awareness among local, state and federal decision makers about the importance of California’s upstream natural gas industry. CNGPA members have significant resources dedicated to the production, gathering and transportation of natural gas in Pacific Gas and Electric Company’s (“PG&E”) service territory. As such, CNGPA has an interest in the issues brought forth by PG&E in its complaint filed with the California Public Utilities Commission (the “Commission”) in Case No. C.03-07-031.

II. Comments

A. Standards Applicable to this Filing.

Rule 45(c)(2) of the Commission’s Rules of Practice and Procedure allows the filing of comments by any party if the filing relates to a special appearance or limited participation in the proceeding. CNGPA was not named as a defendant by PG&E in its complaint and therefore is not a party to the proceeding.[1] As noted previously, CNGPA represents companies involved in the production and gathering of natural gas in PG&E’s service territory and could be directly impacted by the Commission’s decisions in this proceeding. CNGPA was an active participant in the Gas Accord II proceedings (Pacific Gs and Electric Co., A.01-10-011) wherein many of the allegations brought by PG&E were addressed.

B. The issues concerning Interconnections with Independent Storage Providers and any applicable tariff charges have been litigated and are presently before the Commission.

Calpine[2] and Lodi Gas Storage LLC (“LGS”) are correct in stating in their motions to dismiss, that the very issue of storage customers connecting directly with independent non-PG&E storage has been litigated and is currently before the Commission pending a decision. CNGPA’s Executive Director, Rock Zierman, provided initial testimony and reply testimony specifically on PG&E’s proposal to charge for services it does not provide when interconnections are made with storage providers such as LGS. Mr. Zierman testified that California gas production can be increased through the use of these interconnections.

CNGPA and others should not have to go to the additional expense and effort to litigate yet again these issues, particularly since the Commission has yet to issue even an initial decision in Gas Accord II. The Commission should reject PG&E’s complaint as an attempt to re-open the record and augment its position in the Gas Accord II proceeding by granting the motions to dismiss of Calpine and LGS.

C. Interconnections to Independent Storage and the Impact on California Natural Gas Production is being Addressed by the California Energy Commission and the Department of Oil, Gas and Geothermal Resources.

In addition to the tariff issues under consideration in the Gas Accord II proceeding, the use of independent storage to enhance natural gas production within California is a matter under review by the California Energy Commission (“CEC”) and the Department of Oil, Gas and Geothermal Resources (“DOGGR”). On May 28, 2003, the CEC and DOGGR held a joint workshop to explore ways in which natural gas production could be enhanced in California. Participants were asked to submit issues for consideration that examined potential barriers to increasing in-state production. Included in the discussion of issues focusing on gathering assets, gas quality specifications, and permitting was the issue of whether direct interconnects with independent storage should be permitted. This issue was brought forward by both CNGPA and Calpine. PG&E participated in the discussion and raised objections to including the topic in future CEC/DOGGR workshop discussions. The topic provoked substantial dialogue during the initial workshop, after which it was determined that storage direct interconnects warranted further discussion as a way of enhancing natural gas production. PG&E’s objections to including the topic in the workshop process were overruled and the matter will be a subject of future CEC/DOGGR discussions.

PG&E’s complaint in this matter should not go forward. Doing so will serve the purpose of upholding PG&E’s initial objections in the workshops and impede any future discussion within the CEC and DOGGR proceeding. This would be done without the full benefit of participation of other producers, storage operators and energy regulators. The CNGPA believes that the motion to dismiss submitted by Calpine and LGS should be granted.

III. CONCLUSION

The California legislature has deemed it good public policy to encourage the development of independent storage and the production of natural gas within the state. The relief sought by PG&E is counter to these policy goals. CNPGA urges the Commission to dismiss PG&E’s complaint.

DATED: September 11, 2003 Respectfully submitted,

_______________________________

Edward G. Poole

Anderson & Poole

601 California Street, Suite 1300

San Francisco, CA 94108

Telephone: 415-956-6413

Facsimile: 415-956-6416

Email: epoole@

Attorneys for the California Natural Gas Producers Association

CERTIFICATE OF SERVICE

I hereby certify that I have this day served a copy of the foregoing document on all parties of record in the above captioned proceedings by serving a properly addressed copy by first-class mail with postage prepaid to the following as no service list has been created:

See attached Service List

Executed on September 11, 2003, at San Francisco, California.

| |Dianne T. Stamatelos |

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[1] CNGPA reserves the right to intervene as an active participant in this proceeding if the Commission fails to grant the motions to dismiss.

[2] Collectively named defendants Calpine Corporation; CPN Pipeline Company; Calpine Energy Services, L. P., Calpine Natural Gas Company.

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