Maximum Daily Quantities. (Emphasis added.)

We will not rule on the propriety of section 5.4 at this time since it was not addressed in the January 22, 1991 order and it was not relevant to the open season. 13 If PGT seeks Commission approval of section 5.4, it must resubmit that provision pursuant to the procedures contemplated in section VB1 of this order.

3. Shippers' unconditional obligation to pay a reservation charge

Section 6.1 of article 6 of the revised service agreement provides:

Notwithstanding anything herein to the contrary, including the provisions of Article I hereof, Shipper's obligation to pay the FERC approved Reservation Charge as authorized by the FERC in Docket No. CP89-460 or the comparable provision of any superseding FERC order, is absolute and unconditional, except as otherwise provided in the applicable rate schedule approved in Docket No. CP89-460. [emphasis added]

In the January 22 order (mimeo, at 26), the Commission held that similar language14 regarding a shipper's unconditional obligation to make reservation payments was "too restrictive and onerous on the shippers since it requires them to pay for the transportation service under any force majeure circumstances and since it has the effect of guaranteeing revenue." In addition, the Commission found that the tariff reveals no provision for the shippers to negotiate this onerous require

Apparently, in response to the above directives of the January 22 order, PGT has included new section 6.1 in the revised service agreement. At present, we are unable to determine if those directives have been satisfied, since the rate schedule-referred to in the proviso "except as otherwise provided in the applicable rate schedule approved in Docket No. CP89-460" has not been submitted for review. Given this uncertainty, we will direct PGT to file that rate schedule according to the procedures in section VB1 of this order.

4. Capacity Brokering

PGT has also included a new provision in section 7.7 of its form of service agreement

13 We note that PG&E, an affiliate of PGT, is protesting a similar curtailment proposal in the El Paso optional certificate proceeding pending before the Commission.

14 The January 22 order reviewed article 4.1 of PGT's Pro Forma Tariff which provides:

No cause whatsoever, including without limitation the failure of PGT to perform and the causes

which provides that the shipper may not assign any of its rights until after the expansion facilities have commenced commercial operation. Thereafter, the service agreement provides, the shipper may assign its rights in accordance with the General Terms and Conditions.

We note that on May 7, 1990, PGT filed a capacity brokering program in Docket No. CP90-1031-000. Under that program, the rights of PGT's firm transportation customers could be assigned to third parties for a limited term. Since the capacity brokering proposal is pending review in Docket No. CP90-1031-000, issues relating to the propriety of the capacity brokering program are more appropriately raised and addressed in that proceeding. Accordingly, we will require PGT to remove the capacity brokering provision from its service agreement.

5. Miscellaneous Provisions

We note that PGT has removed from its new form of service agreement the provision that the agreement in all respects shall be and remains subject to the applicable provisions of Rate Schedule T-3 or superseding rate schedules and of the General Terms and Conditions of PGT's FERC Gas Tariff Second Revised Volume No. 1 on file with the FERC. Although the removal may have been inadvertent, we will require PGT to include language in the service agreement which provides that the service agreement in all respects shall be subject to the applicable rate schedule approved for the firm transportation service.

In addition, PGT has included a new provision in section 7.8 of its form of service agreement which provides:

If PGT modifies or changes any term or condition specified in an effective Firm Transportation Service Agreement with any Shipper service authorized by the FERC in Docket No. CP89-460, within sixty days thereafter, PGT shall offer to make the same term(s) and condition(s) applicable to any other shipper....

Although we agree that the provision should be included in the service agreement, the parties to the PGT expansion proceeding should have an opportunity to comment on the inclusion of such provision in the service agreement. Accordingly, if PGT seeks Commission approval of section 7.8, it must resubmit that

specified in Paragraph 12.1 of the General Terms and Conditions, shall relieve Shipper from its obligation to make payments due including the payments of Reservation Charges. [Emphasis added].

15 January 22 order, mimeo, at 26.

provision pursuant to the procedures contemplated by section VB1 of this order.

C. The Request for Waiver

Finally, we do not find good cause to grant waiver of the Commission's regulations to permit a shortened notice period so that the tariff sheets can be made effective by February 20, 1991. Such a request is premature since the sheets were filed as pro forma tariff sheets. As discussed above, PGT may proceed with the open season but it runs the risk that the Commission may subsequently find that any contracts should be subject to the terms and conditions ultimately approved for the expansion transportation service.

D. The Responsive Pleadings

Our statement that PGT may proceed with the open season at its own risk grants Altamont's request that the Commission make clear that it is not making any finding as to the reasonableness or suitability of the new open season procedures. In a subsequent order, we will make a final determination on the reasonableness of such tariff sheets. In making that determination, we will consider, among other things, the questions posed by El Paso in its response to PGT's motion.

As noted before, the Open Season Shippers' request clarification that the 250 MMcf per day of capacity allocated to the nonutility shippers under the previous open season be explicitly excluded from the new open season process. They argue that such clarification would protect the rights of the nonutility shippers who acted in good faith, and would hold out for the new open season only that capacity which the Commission identified as "tainted" i.e., in particular capacity given to PGT's parent, PG&E. However, that argument overlooks the "untainted" capacity rights of those individual utility shippers who, through no fault of their own, also acted in good faith when they signed precedent agreements for capacity on the expansion project. Permitting PGT to reserve the 250 MMcf of capacity allocated previously to the open season shippers for their exclusive use, coupled with increased competition for the remaining capacity by PG&E and other potential shippers who may now choose to partici

pate in the new expedited open season, would reduce the capacity rights of the individual utility shippers. Thus, in order to protect capacity rights of all shippers (including the nonutility and utility shippers), we will require a new open season for the initial allocation of all capacity on the PGT expansion project in order to remedy the undue discrimination noted in the January 22 order.

Finally, the Open Season Shippers correctly argue that in Kern River, the Commission directed Kern River to hold a new open season but permitted the shippers that had already entered into contractual arrangements with Kern River to maintain their present position in the queue for service. We allowed the shippers to retain their capacity rights in the absence of protests complaining that Kern River unduly discriminated in the allocation of capacity. However, the Commission required Wyoming-California Pipeline Company (Wycal), to conduct a new open season after finding that Wycal had discriminated in the undue allocation of capacity.16 The Commission did not permit the shippers that had already entered into contractual arrangements with Wycal to maintain their present position in the queue for service. Consistent with Wycal's treatment, we will require a new open season for all of the PGT expansion system but not permit any shippers that had already entered into contracts with PGT to retain their position on the queue for service, because in the January 22 order we have previously found that PGT has unduly discriminated in the allocation of initial capacity.

The Commission orders:

(A) The emergency motion for clarification, filed by PGT on January 25, 1991 in Docket No. CP89-460-002, is granted as set out in the text of this order.

(B) PGT's request for waiver of the regulations to permit a shortened notice is denied.

(C) PGT shall revise and/or delete the tariff provisions consistent with the discussion in the body of the order.

(D) The Open Season Shippers' motion for clarification, filed on February 21, 1991, is denied.

and CP91-1333-000

Order Granting Requests for Waiver

16 See Kern River Gas Transmission Company, 51 FERC 61,195, at p. 61,542 (1990), compliance filing modified and accepted, 53 FERC ¶ 61,172 (1990).

design issues to the presiding administrative law judge (ALJ).2

On October 1, 1990, PGT submitted its initial quarterly purchased gas adjustment (PGA) filing. El Paso protested the filing with regard to, among other things, PGT's passthrough of its Canadian gas purchases and, what El Paso styled as, PGT's "proxy" methodology which PGT utilized to classify such costs.3 In its letter order issued October 31, 1990 [53 FERC [61,175], the Commission stated that PGT had appropriately classified its Canadian gas costs in accordance with Opinion Nos. 256 and 256-A. The Commission also denied El Paso's protest on the basis that only typographical or computational errors may be challenged in a pipeline's quarterly PGA filing.

On November 30, 1990, El Paso filed a request for rehearing of the October 31 letter order and, on the same date, a motion for clarification of the proper forum to raise the issues set forth in the rehearing request.5 By order issued January 23, 1991,6 the Commission denied El Paso's request for rehearing but, in response to El Paso's motion, clarified that the proper forum for El Paso to raise issues concerning PGT's classification of Canadian gas costs is in the ongoing remanded section 4 rate design proceeding in Docket No. RP87-62 et al.

In the remanded rate design proceeding, the ALJ, by order issued January 29, 1991, convened a Prehearing Conference on February 7, 1991, to discuss and clarify the nature of the issue remanded by the Commission for adjudication. As reflected in the transcript of the Prehearing Conference, the ALJ stated that, because the Commission had found that PGT's methodology was in compliance with Opinion No. 256, he did not understand what it is that was supposed to be done in the proceeding. The ALJ, therefore, entertained the arguments of the parties concerning their interpretation of the Commission's January 23 order, i.e., whether there was an issue for resolution and,

2 The remanded rate design proceeding has been consolidated with PGT's latest section 4 rate case in Docket No. RP90-109-000. Pacific Gas Transmission Co., 51 FERC ¶ 61,246 (1990).

3 PGT classified its Canadian gas costs to demand or commodity based on the same ratio as its own non-gas costs were classified in the settlement approved in Docket No. RP87-62-000.

* See 37 FERC ¶61,215 (1986) and 39 FERC 61,218 (1987).

5 The issues raised by El Paso were, inter alia, that: (1) the Commission erred on substantive and procedural grounds; and (2) PGT's proxy methodology discriminates against U.S. volumes.

6 Pacific Gas Transmission Co., 54 FERC [61,046 (1991)(Trabandt dissent in part).

if so, what it was and whether the issue was to be briefed or set for full adjudication. Since trial was to commence on March 12, 1991, the ALJ also discussed different procedural methods of addressing the issue remanded by the Commission (like phasing the proceeding). The parties' interpretation of what they believed the Commission intended in the January 23 order varied greatly. Therefore, the ALJ directed El Paso to file a motion requesting the Commission to provide further clarification on what it wants to be done.

Emergency Motion

Pursuant to the ALJ's instruction, on February 15, 1991, El Paso filed the instant Emergency Motion. El Paso states that the ALJ directed it to file the Emergency Motion to obtain further clarification of what the Commission intended in the January 23 order when it stated that the ongoing remanded section 4 rate design proceeding in Docket No. RP87-62-000 et al., is the proper forum for El Paso to raise questions concerning the proper classification of Canadian gas costs. In addition, El Paso states that the ALJ directed El Paso to attach a copy of the transcript of the February 7, 1991 Prehearing Conference, which it did as Attachment A to the motion. In the Emergency Motion,8 El Paso requests the Commission to issue an order: (1) providing for immediate discovery procedures; (2) providing for the filing of testimony; (3) providing for an expedited hearing; and (4) assuring that a full and effective remedy concerning the issues described in the motion will not be prejudiced by the disposition of earlier phases of the Docket No. RP87-62-000 et al., proceedings.

Rehearing Request

On February 22, 1991, El Paso filed a request for rehearing of the January 23 order on rehearing. In the request for rehearing, El Paso does not object to the decisions contained in the January 23 order. Rather, El Paso states

7 The Commission staff stated that the cost classification issues have been in the case since the very beginning and that El Paso has been fully aware of that from day one. Commission staff further stated that El Paso had contacted their witness on numerous occasions concerning staff's position on the issue. In addition, staff asserted that it sent out a data request, which El Paso received, so that El Paso knew that actual data concerning the Canadian costs were being sought. Staff argues that El Paso chose not to use the instant proceeding to set forth their position regarding the classification of costs or the methodology used. Tr. at 3127, 3146-3148.

8 El Paso states that it filed the Emergency Motion only because it was directed to do so because, in El Paso's opinion, the Commission's January 23 order was clear.

Docket No. ER90-54-001

On April 13, 1990, Oklahoma Gas and Electric Company (Oklahoma Gas) and Public Service Company of Oklahoma (PSO) filed separate requests for rehearing of the Commission's order issued in this proceeding on March 16, 1990 (the March 16, 1990 order).1 On April 16, 1990, the Oklahoma Corporation Commission (Oklahoma Commission) also filed a request for rehearing of that order. The March 16, 1990 order accepted for filing transmission service and energy sales agreements (Agreements) by and between People's Electric Cooperative (People's) and two proposed wholesale customers: the Chickasaw Tribal Utility Authority (Tribe) and Byng Public Works Authority (Byng).2

Oklahoma Gas argues that the Commission erred in asserting jurisdiction over the Agree

9 At the Prehearing Conference, the ALJ and the parties discussed whether there should be one or two Initial Decisions. The Commission would prefer that, if possible, all the issues be addressed in one Initial Decision.

1 People's Electric Cooperative, 50 FERC 61,358 (1990).

ments pursuant to the Federal Power Act (FPA). According to Oklahoma Gas, the March 16, 1990 order failed to recognize that People's filing presented issues of fact requiring a hearing. Oklahoma Gas claims that the purported wholesale sales proposed by People's are not "sales for resale" but are merely sales directly to ultimate consumers. Oklahoma Gas also argues that People's proposed transmission service is not transmission service within the meaning of the FPA, but is merely local distribution service. Oklahoma Gas asks the Commission to reverse its finding of jurisdiction in the March 16, 1990 order, or to examine at a hearing People's proposed activities pursuant to the Agreements, and develop a more complete basis in the record for Commission jurisdiction.

Oklahoma Gas makes two allegations in support of its argument that the Agreements will not involve wholesale sales, i.e., sales for resale.

2 The Agreements provide for People's to transmit power from third parties to the Tribe or Byng and for People's to purchase power for resale to the Tribe or Byng.