Opinion ID: 726753
Heading Depth: 5
Heading Rank: 1

Heading: 1991-92 Approvals of Utility NGV Programs

Text: 20 The first significant CPUC decision to focus on the role of utilities in the NGV market is a July 1991 decision approving an application by Pacific Gas & Electric Company (PG & E) to establish an NGV program. Re Pacific Gas and Elec. Co., 40 C.P.U.C.2d 722, 1991 WL 501752 (Cal.P.U.C.1991) (hereinafter PG & E ), modified on denial of reh'g, 41 C.P.U.C.2d 428, 1991 WL 552570 (Cal.P.U.C.1991). The PG & E decision is relevant to this case not merely because of the similarity of subject matter but because the commission expressly adopted the policy positions expressed in this opinion when, less than six months later, it approved SoCalGas' application to establish an NGV program. Re Southern California Gas Co., 43 C.P.U.C.2d 104, 110, 1992 WL 584042 (Cal.P.U.C.1992) (We intend that the policy issues decided in [PG & E ] apply to SoCalGas.). 21 As an initial matter, the commission found that because of consumer indifference, the low cost of gasoline, the lack of oil company participation, and the lack of financial incentives, the chance of a natural gas fueled vehicle industry surviving and growing without some form of initial public assistance is practically nil. 40 C.P.U.C.2d at 734. The commission approved utility involvement in the NGV market as just the kind of assistance necessary for the industry to survive and grow: 22 In funding the utility for a two-year period we are trying to promote the development of the equipment and infrastructure needed to facilitate the use of natural gas as a vehicle fuel. Utilities play a critical role in the development of this market; but the role, though critical, should be temporary. However, we are not prepared to set a timetable for the extrication of the utilities from the market because it is not clear how long their presence will be needed to provide the bridge to a profitable competitive market for retail CNG. 23 Id. at 742. As the commission put it in a later order on the subject, [t]he utilities are called upon to 'jump start' the retail market by providing refueling stations and offering conversion incentives. Re Utility Involvement in the Market for Low-Emission Vehicles, Interim Order 91-10-029 (Cal.P.U.C. Oct. 23, 1991), 1991 WL 496693 at  8. Therefore, the commission approved the utilities' proposals to spend millions of dollars on NGV programs--programs that included the construction of NGV fueling stations--and to charge the costs to ratepayers. PG & E, 40 C.P.U.C.2d at 745 (authorizing PG & E to spend $12,485,000); Re Southern California Gas, 43 C.P.U.C.2d at 113 (authorizing SoCalGas to spend $10,818,000); Re San Diego Gas & Electric Co., 40 C.P.U.C.2d 713, 1991 WL 521000 (Cal.P.U.C.1991) (authorizing SDG & E to spend $6,761,000), modified on denial of reh'g, 41 C.P.U.C.2d 428, 1991 WL 531200 (Cal.P.U.C.1991). 24 In making its decision, the commission expressly considered the possible effects of utility participation in the NGV market on competition: 25 The record is clear, and we find, that PG & E's NGV program is not anticompetitive. There are no competitors now, and potential competitors, if there are any, are waiting for PG & E to show them the way through the investment of PG & E's and ratepayers' funds.... [T]he short answer to [those] who fear competition from PG & E, is that there is no competition. PG & E is in this market by default. No one wants to compete. 26 40 C.P.U.C.2d at 742. Thus, the CPUC reconciled the legislature's two goals of utility participation and fair competition in the NGV-infrastructure market by clearly articulating a policy of allowing ratepayer-funded utility participation in the market because no nonutility enterprises with whom the utilities might unfairly compete were in that market. 27 The commission, however, expressed its intent to monitor closely the impact of utility participation in the market on the growth of competition: 28 As competition in the NGV market emerges and evolves, the Commission will be in a position to adjust the PG & E program, as necessary, in response. PG & E will be subject to ongoing reasonableness reviews. In addition, PG & E's entire NGV program will be subject to review should PG & E apply to continue the program beyond its two-year term. PG & E has also agreed to submit periodic reports to the Commission. The Commission will have ample opportunity to review the competitive situation and make mid-course corrections as necessary. 29 Id. Thus, the CPUC clearly articulated its continuing responsibility for balancing the legislative goals of utility participation in the NGV market and fair competition in that market. 30