Full opinion text
MEMORANDUM, OPINION, AND ORDER ROSENTHAL, District Judge. In this antitrust case, plaintiffs, who own and operate cogeneration facilities in Kern County, California, challenge the inclusion of transport-or-pay clauses in two long-term natural gas transportation contracts with the defendant utility company. The California Public Utility Commission approved both contracts in 1988; the contracts expire in the year 2012. Plaintiffs assert that by refusing to enter into contracts without transport-or-pay clauses, defendant monopolized or attempted to monopolize the natural gas transportation market in Kern County, California. Defendant has moved for summary judgment, asserting that as a matter of law, the state action doctrine, the filed rate doctrine, and the Noerr-Pennington doctrine preclude plaintiffs’ antitrust claims. This court has carefully considered the pleadings, the motions, the parties’ submis-, sions, the arguments of counsel, and the applicable law. Based on this review, this court GRANTS defendant’s motion for summary judgment, for the reasons stated below. I. Background Defendant Southern California Gas Company (“SoCalGas”) is a California corporation providing natural'gas and gas transportation services in parts of central and southern California. SoCalGas is subject to regulation by the California Public Utilities Commission (“CPUC”). As a regulated utility, SoCalGas is required to provide service to all customers within its service area and can do so only on the basis of tariffs or, as in this case, contracts, approved by the CPUC. In the mid-1980s, SoCalGas was thé only natural gas supply and transportation company in western Kern County, California, where plaintiffs McKittrick Limited (“McKit-trick”) and Chalk Cliff Limited (“Chalk Cliff’) were each developing enhanced oil recovery cogeneration facilities. Plaintiffs Destec Energy, Inc., Destec Holdings, Inc., McKittrick Power Associates, L.P., CC Co-Gen, Inc., Galloway Power Corporation, McKittrick Power Generation I, Inc., Chalk Cliff Limited, Chalk Cliff Cogen, Inc., and Dominion Cogen CA, Inc., were, and are, direct and indirect owners and operators of cogeneration facilities in Kern County, California. (Docket Entry No. 1, ¶ 3). In 1985, Kern River Gas Transmission Company (“Kern River”), a company based in Houston, Texas, and Mojave Pipeline Company (“Mojave Pipeline”), a company based in El Paso, Texas, sought certification from the Federal Energy Regulation Commission (“FERC”) to build pipelines to transport natural gas into the Kern County, California market to serve the enhanced oil recovery (“EOR”) steam generation and co-generation markets. In the mid-1980s, while seeking investors’ commitments to their proposed cogeneration facilities, plaintiffs McKittrick and Chalk Cliff began negotiating natural gas pipeline transportation contracts with SoCalGas. Plaintiffs sought long-term agreements without “transport-or-pay” provisions. Such provisions require shippers or purchasers to pay for the transportation of certain quantities of gas, regardless of whether that amount of gas is actually transported. In return, the transporter agrees to commit a certain pipeline capacity to that customer. Plaintiffs allege that SoCalGas, knowing that plaintiffs needed gas transportation service on competitive terms and could not endure delays because of their need to obtain financing for the proposed cogeneration plants, refused to agree to contract without transport-or-pay provisions. (Docket Entry No. 1, p. 10). It is undisputed that on July 26, 1988, plaintiffs and SoCalGas entered into two fifteen-year transportation contracts containing transport-or-pay provisions. (Docket Entry No. 7, Exhibit A, Attachments 1 and 2, Art. 2). It is also undisputed that on September 14,1988, following contested proceedings, the CPUC issued Resolutions G-2821 and G-2822, approving each contract and specifically noting the presence of the transport-or-pay requirements. (Docket Entry No. 6, Exhibits 7 and 8). Plaintiffs allege that they were “compelled to accept SoCalGas’s contracts,” with the transport-or-pay provisions, because they were unable to finance the construction of the cogeneration projects without long-term transportation contracts. Plaintiffs allege that in August 1989, So-CalGas further enlarged and entrenched its monopoly by settling litigation with Kem River and Mojave Pipeline over their efforts to obtain FERC certification for interstate pipeline service into Kern County. Under the settlement, SoCalGas agreed to stop resisting Kern River’s and Mojave Pipeline’s efforts to obtain FERC certification. In exchange, Kern River and Mojave Pipeline agreed to provide SoCalGas options to buy the California portions of their pipelines in the year 2012. That date coincides with the expiration of the long-term contracts between plaintiffs and SoCalGas. Plaintiffs allege that if SoCalGas exercises these options in 2012, SoCalGas will once again have an exclusive monopoly over the natural gas transportation market in Kern County, California. In 1992, Kern River and Mojave Pipeline had received FERC certification, completed construction, and begun interstate commercial gas transportation service in Kern County, California. Plaintiffs allege that they could not use the competitive advantages of such service because the “transport-or-pay” provision in the SoCalGas contracts made it economically infeasible for them to do so. SoCalGas notes that plaintiffs could have obtained gas transportation services from SoCalGas at higher tariffs or rates, without transport-or-pay clauses, rather than negotiating individual long-term contracts with transport-or-pay clauses. By entering the long-term contracts, the plaintiffs obtained cheaper rates in the years before the competitors’ service became available. (Docket Entry No. 5, p. 4 and No. 38, p. 8). On May 26, 1995, plaintiffs filed this suit, alleging that SoCalGas monopolized and attempted to monopolize and/or restrain trade in the market for the transportation of natural gas to the cogeneration facilities owned by MeKittrick and Chalk Cliff, by refusing to negotiate long-term contracts without transport-or-pay provisions. Plaintiffs also allege that SoCalGas’s challenge to FERC certification of the competitors’ proposed pipelines and SoCalGas’s acquisition of options to purchase the competitors’ California pipeline operations were further attempts to monopolize the natural gas transportation markets in Kern County, California. Plaintiffs allege violations of the Sherman Act, 15 U.S.C. § 2, and the Texas Free Enterprise and Antitrust Act, Tex. Bus. & Com. Code ANN. § 15.05 (West 1987). Plaintiffs seek a declaratory judgment that the transport-or-pay provisions of their contracts with SoCalGas are void and unenforceable, damages for violations of the antitrust laws, and an injunction against further antitrust violations. SoCalGas argues that the state action doctrine and the filed rate doctrine preclude plaintiffs’ antitrust claims based on the transport-or-pay provisions; that ripeness issues, a lack of antitrust injury, and the state action doctrine preclude plaintiffs’ claims based on the options to purchase the California portions of the Texas-based pipelines; and that the Noerr-Pennington doctrine precludes plaintiffs’ claims based on SoCalGas’s opposition to Kern River’s and Mojave Pipeline’s FERC certification application. (Docket Entry No. 5). SoCalGas filed suit against plaintiffs in California state court, asserting breach of contract for plaintiffs’ refusal to pay amounts due under the transportation contracts. Plaintiffs asserted antitrust challenges as affirmative defenses to that suit. The state court dismissed those defenses; the breach of contract suit is proceeding in that forum. On February 23, 1996, plaintiffs moved for discovery in this case under Rule 56(f). (Docket Entry No. 39). Following a hearing, this court granted that motion in part, allowing plaintiffs to depose Stanley Hulett and Donald Vial, CPUC commissioners during the relevant time period, and Frederick John, former senior vice president of SoCal-Gas’s parent company and vice-president of regulatory affairs for SoCalGas. (Docket Entry No. 53). The summary judgment record includes excerpts from those depositions. The summary judgment record also includes the following: • copies of the two contracts at issue (Docket Entry No. 60, Exhibits 15 and 17); • the relevant California statutes, CPUC regulations, and CPUC agency decisions (Docket Entry Nos. 6, 42, 57, and 60); • the affidavit of John Van Noord, an employee of another CPUC regulated utility,. Pacific Gas & Electric Co. (Docket Entry No. 15, Exhibit 1, Tab A); • the affidavit of Donald Asher, an employee of the predecessor of Destec Energy, Inc. (id., Tab B); • the affidavit of Stanley Hulett, a former CPUC commissioner (id., Tab C); • the affidavit of John R. Scalp, rate design manager for SoCalGas (Docket Entry No. 42, Exhibit D); • the affidavit of Albert Boyce, president of Tannehill Electric Co., Inc., another SoCalGas customer (Docket Entry No. 60, Vol. 1, Exhibit 3); • the affidavit of Robert B. Weisenmiller, a technical consultant on energy markets and regulations (id., Vol. 2, Exhibit 8); • the affidavit of Catherine M. Elder, an expert in natural gas markets and regulation (id., Exhibit 9); • a memorandum written by Dan Douglass, an attorney at SoCalGas (Docket Entry No. 60, Vol. 2, Exhibit 6); • a letter written by Frederick John to the CPUC (id., Vol. 3, Exhibits 19 and 20); • a memorandum written by Joan LeSage, an in-house attorney for SoCalGas (id., Exhibit 21); and • a letter from Albert Boyce to Stanley Hulett (Docket Entry No. 65, Exhibit 3). The parties have filed a number of excellent briefs, and the CPUC has filed an ami-cus brief. These briefs present the arguments on each of the dispositive issues, which ■ the court analyzes below. II. The California Statutes, Regulations, and CPUC Decisions The California legislature established the CPUC to regulate the rates, services, and facilities of California’s public utilities. Cal. Const, art. XII; Cal. Pub. Util. Code §§ 454-55 (West 1994 Supp.). The CPUC supervises the rate charged by natural gas utilities, including SoCalGas. Id. In the exercise , of these supervisory powers, the CPUC is responsible for assuring that the gas utilities’ rates are “just and reasonable” and not “unlawful, unjust, unreasonable, discriminatory, or preferential.” Id. §§ 451, 728, 729. No utility may charge a rate unless it is approved by the CPUC. Id. § 454(a). Generally, a utility must charge rates set out in the tariff schedule applicable to all utilities. Id. § 532. However, the CPUC may establish exceptions to this rule. Id. A utility may charge rates different from established tariffs or rates only after the utility has sought and obtained CPUC approval. Id. § 454(a). A utility wishing to change the rates charged must give notice of its application for change to all customers affected by the proposed change. Id. § 454. Rates cannot be changed until and unless the CPUC has determined that the new rate is justified. Id. §§ 454(a), 455. Public hearings are held to determine the reasonableness of proposed rates. Id. § 311. Administrative law judges accept evidence on behalf of the CPUC and prepare and file opinions setting out recommendations, findings, and conclusions with the CPUC. Id. The administrative law judges’ recommendations are “proposed decisions,” which are placed into the public record. Id. Ratepayers and the public are represented at rate proceedings before the CPUC by the statutorily created Division of Ratepayer Advocates. See, e.g., Id. §§ 309.5, 321, 321.5, 454. The CPUC may inspect the utilities’ accounts, books, papers, and documents, and may independently audit the utilities. Id. §§ 314(a), 314.5, 2100-15. The CPUC may examine under oath any officer, agent, or employee of a public utility in relation to its business and affairs. Id. § 314(a). If a CPUC regulated utility charges a tariff not approved by the CPUC, the CPUC may require the utility to collect the undercharge and may fine gas utilities for allowing that undercharge. Id. § 2100. The CPUC’s decisions are published in full within a year after issuance. Id. § 323. In 1978, the United States Congress passed the Natural Gas Policy Act, 15 U.S.C. §§ 3301-3432, which changed federal policy toward the natural gas market and moved toward deregulation. In 1984 and 1985, FERC issued a series of rulings, including FERC Order Number 380 in May 1984, and subsequent proposed and final rules, which instituted new transportation procedures for natural gas pipelines. Beginning in 1985, the CPUC issued rulings to take account of these changes in the natural gas market. The CPUC specifically addressed the changes that would allow interstate pipelines to use a blanket transportation certificate and therefore expand the interstate transportation market. On December 20, 1985, the CPUC issued an interim decision, D. 85-12-102, 20 CPUC 2d 6 (1985), for the stated purpose of allowing intrastate utilities to meet the competition from the proposed new interstate pipelines and to meet the needs of the EOR market. In this decision, the CPUC recognized the unique status of the EOR market. Id. at 20. The CPUC also affirmed its commitment to having the Kern County, California EOR market served by California gas distribution Utilities, rather than by interstate pipelines. Id. In the December 1985 decision, the CPUC emphasized that the EOR market required “special consideration.” Because EOR customers were served on schedules that allowed for monthly variations in their rates, the CPUC stated that conventional tariffs and the margin derived from them “cannot presently be considered a reasonable proxy for the transportation rate which would be required to provide service to the entire EOR market, which is the goal of both this Commission and the California distribution companies.” Id. The December 1985 CPUC decision allowed utilities to negotiate individual long-term transportation contracts with EOR customers rather than using set tariffs. This approach was to “provide utilities with the negotiating flexibility required to meet the needs of their EOR customers and to meet the competition of the interstate pipeline proposals.” Id. The CPUC set a specific rate treatment for all gas transported to EOR facilities, including cogeneration facilities, and required that all negotiated contracts be filed with the CPUC Evaluation and Compliance Division, which would be responsible for assuring that all the contracts were consistent with the incentive rate mechanism provided. The CPUC stated that the purpose of its treatment of EOR customers was to “secure for California ratepayers the substantial benefits of having California distribution companies serve this important new market.” Id. at 21. The CPUC specifically required the use of take-or-pay provisions in long-term transportation contracts in Decision No. 85-12-102. That decision stated in relevant part as follows: We strongly concur with the provision [of SoCalGas’s proposal] that makes the customer liable for payment of not less than 50% of the transport fees for the volumes agreed to be delivered on an annual basis. This will provide the utility with a measure of certainty that the transportation customer will indeed remain a transportation customer for the list of the contract, and will not in an unpredictable fashion abandon transportation and seek to return as a sales customer, or leave the system altogether. This certainty seems important for orderly utility planning of its gas acquisition needs. (Docket Entry No. 6, Exhibit 5, p. 26). The CPUC made a finding of fact that “[a] 50% take-or-pay provision is a reasonable condition to all long-term transportation agreements in order to encourage transportation customers to transport their own gas for the entire life of their contract.” (Id, p. 33, Finding of Fact No. 54). On December 3, 1986, the CPUC issued Decision Nos. 86-12-009 and : 86-12-010 (“Decisions 9 and 10”) (22 CPUC 2d 444 and 22 CPUC 2d 491, 1986 WL 215056) (Docket Entry No. 57, Exhibits 5 and 2). These decisions followed the CPUC’s Order Instituting Rulemaking (“OIR”) 86-06-006 and Order Instituting Investigation (“Oil”) 86-06-005. In Decisions 9 and 10, the CPUC “unbundled” the traditional combination service provided by utilities, separating the “merchant function,” which was recognized as more competitive in nature, from the “transmission function,” with its natural monopoly characteristics and economies of scale. D. 86-12-009, 22 CPUC 2d at 450. The CPUC divided gas customers into core'— those which must receive bundled gas service from the utilities — and noncore — those which will be allowed to pick and choose from among a variety of transmission and procurement services. The CPUC described the relationship between Decisions 9 and 10 as follows: [T]ogether [they] set forth final policies to restructure natural gas regulation in the State of California. In [Decision 10] we adopt rules establishing the general regulatory and industry structures, taking into consideration comments filed by parties in response to a set of proposed rules.... Today’s companion decision [9]' addresses the allocation of costs and design of gas transmission and procurement rates in light of the broader policies adopted in this decision. D. 86-12-010, 22 CPUC 2d at 501. The CPUC outlined the background of the companion decisions, stating: [I]n December 1985, we ordered the regulated California gas utilities to offer long term gas transportation services to customers which wished to purchase nonutility gas supplies [Decision 85-12-102]_ Both long and short-term rates were ordered based on an “equivalent margin recovery” approach.... As an exception enhanced oil recovery customers were allowed to negotiate lower transportation rates. In the meantime, we were laying the foundations for the present move toward cost-based rates.... [T]he two proceedings from which orders emanate today were initiated on June 5, 1986. Order Instituting Investigation 86-06-005 proposed cost allocation and rate design policies based on long run marginal costs. Evidentiary hearings have been held ... and the issues are resolved in the companion decision [9] issued today. This OIR [86-06-006], issued at the same time, contained a set of proposed policies regarding the overall industry structure and regulatory approach contemplated. Id. at 502-03. In Decision 10, under the heading “Intrastate Transmission,” the CPUC made the following statements relating to take-or-pay clauses: [The] arguments are more persuasive that there are no cost differences between long term and short term transmission service sufficient to justify a 50 percent take-or-pay requirement for the long term service without a comparable charge for short term service. We also agree ... that the intent of a take-or-pay requirement can be met equally well by the demand charge which is contemplated as a separate charge applied to all transmission customers. Elimination of the take-or-pay requirement is consistent with our goal to generally simplify the overall program. We conclude that there should be a continuum of contract lengths available to customers. Although the issue of transmission rates is more fully discussed in our companion decision [9], we note that customers will be allowed to negotiate any combination of contract length and firmness of sendee, and that the rate for such service will be determined through contract negotiations. Id. at 508. The CPUC included Finding of Fact No. 5 and Conclusions of Law Nos. 7 and 8, as follows: 5. There are no cost differences between long-term and short-term transmission service sufficient to justify a 50 percent take-or-pay requirement for only long term service. * * * * * * 7. There should not be take-or-pay requirements for long-term transmission service at this time. * * * * * * 8. There should be a continuum of transmission contract lengths available to non-core customers, with appropriate terms and conditions established through contract negotiations. Id. at 564. In Decision 9, the CPUC detailed specific rules for EOR customers. The CPUC reaffirmed its findings in Decision 85-12-102 that the existing intrastate utilities were sufficient to serve the EOR market: [W]e continue to believe that it is in the best interest of all California gas ratepayers that such Kern County EOR gas demand as may exist be served by the California utilities.... [T]he bypass of existing utility systems by the certification, construction, and use of an interstate pipeline will have a potentially significant adverse impact on the rates of existing ratepayers, who will have to bear a greater proportion of the utilities’ fixed costs by reason of the utilities’ loss of existing load and their potential failure to attract new load. Id. at 480-81. The CPUC summarized its conclusions as to the EOR market: [T]his Commission has consistently held the view that it is in the best interest of all California ratepayers that the California gas distribution utilities serve the EOR market in Kern County and, indeed, throughout California. To achieve this end, and pursuant to our obligation to ensure that the utilities’ rates and services are “just and reasonable” under sections 701, 728, 729, 761, and 762 of the Public Utilities Code, we reaffirm our view that the utilities should seek to serve as much of the EOR market as possible under the terms and conditions set forth in this decision. Service to the EOR market is a key element of our announced policy to serve natural gas customers in the most economically efficient manner and to prevent the possibility that unstructured competition in the gas markets will unfairly disadvantage certain gas customers.... [T]he Commission reaffirms its previous policy which permits the utilities to negotiate individual long-term service contracts with EOR customers and to bring these contracts to the Commission for approval.... We fully expect and encourage the utilities to enter into long-term contracts for service to the EOR market in order to meet the EOR customers’ needs. Id. at 481-82. In Decision 9, the CPUC stated that, when fully implemented, the new rate structure would replace the incentive rate payment structure established by 85-12-102. Id. at 482. The CPUC then stated its unwillingness to set limits beyond “floor and ceiling price limits” on the utilities’ ability to negotiate individual contracts with EOR customers: [I]t should be clear to all parties that we have authorized our utilities to enter into long-term contracts at fixed or otherwise clearly specified transmission rates. Such long-term contracts were first contemplated in D. 85-12-102 .... While today’s decision supersedes D. 85-12-102, we continue to believe that it is important to provide the utilities with the ability to enter into long-term contracts at predictable rates with EOR customers. Beyond the floor and ceiling price limits, we are establishing today, we do not intend to limit the utilities’ ability to negotiate appropriate contract terms and conditions, including contract length, with EOR customers.... The EOR producers have asserted that long-term transportation contracts having terms of 5,10,15, or even 20 years may be necessary to satisfy their service needs. We authorize the utilities to negotiate contracts having such terms, if so desired. We caution the utilities, however, that such long-term contracts engender uncertainties for both the utilities’ ratepayers and then-shareholders. Accordingly, prudent, management might well dictate securing a pricing premium commensurate with the added risks engendered by long-term commitments .... We are requiring that all noncore contracts having terms of 5 years or more be submitted by advice letter for our approval after a 20-day comment period. We view this requirement of contract approval as an essential element of our responsibility actively to supervise the provision of transportation service not only to EOR producers but to all noncore customers. Id. at 483. It is undisputed that SoCalGas submitted the two contracts at issue for CPUC approval. After a notice and comment period, the CPUC approved both contracts. In CPUC Resolutions G-2821 and G-2822, issued on September 14, 1988, the CPUC expressly recognized that the contracts contained transport-or-pay provisions. The Resolution approving the MeKittrick contract included the following provision: Minimum Transmission Obligation: There is no fixed demand charge, however, MeKittrick is required to transport and/or to purchase from SoCal not less than 50% of its annualized contract quantity. If this quantity is not transported or purchased by MeKittrick, MeKittrick will pay the transmission costs for this minimum quantity. Make-up is allowed in the two-year period following the under delivery, however, the right to make-up only extends for one year after contract termination. (Docket Entry No. 6, Exhibit 7). The Resolution approving the Chalk River contract contained the same provision. (Id., Exhibit 8). In the discussion of the transport-or-pay provisions, the CPUC Resolutions contained the following statement: D. 85-12-102 also stated that “should a negotiated rate ever become less than the floor described above (3 cents per therm at the time), shareholders will be at risk for making up the deficiency.” Finding 54 (at p. 46) states: “A 50% take-or-pay provision is a reasonable condition to all long-term agreements in order to encourage transportation customers to transport their own gas for the entire life of their contract.” (Id., Exhibit 7). These statutes and agency decisions and resolutions frame the issue presented here. III. The Elements of the State Action Doctrine The Fifth Circuit has summarized the background of the state action doctrine, as follows: In the seminal case of Parker v. Brown, the Supreme Court, addressing whether .a state marketing program violated the [Sherman Anti-Trust] Act, held .that “in a dual system of government in which, under the Constitution, the states are sovereign, save only as Congress may constitutionally subtract from their authority, an unexpressed purpose to nullify a state’s control oyer its officers and agents is not lightly to be attributed to Congress.” Therefore, “in view of the [Act’s] words and history, it must be taken to be a prohibition of individual and not state action.” Thus, from Parker originated the “state action doctrine,” which confers antitrust immunity for state regulatory programs. The Court subsequently made clear in [California Retail Liquor Dealers Assn v.] Midcal [Aluminum, Inc.] that private party conduct pursuant to a regulatory program shares this immunity only if the conduct meets both prongs of a two-prong test, henceforth called the “Midcal test.” This test requires that: (1) the challenged restraint be clearly articulated and affirmatively expressed as state policy; and (2) the state actively supervise any anticom-petitive conduct. DFW Metro Line v. Southwestern Bell, 988 F.2d 601, 604 (5th Cir.1993) (citing Parker v. Brown, 317 U.S. 341, 352-53, 63 S.Ct. 307, 314, 87 L.Ed. 315 (1943); California Retail Liquor Dealers Ass’n v. Midcal Aluminum, Inc. 445 U.S. 97, 104-06, 100 S.Ct. 937, 943, 63 L.Ed.2d 233 (1980)). There is a close relationship between the two prongs of the Midcal test. “Both are directed at ensuring that particular anticompetitive mechanisms operate because of a deliberate and intended state policy.” FTC v. Ticor Title Ins. Co., 504 U.S. 621, 635-37, 112 S.Ct. 2169, 2178, 119 L.Ed.2d 410 (1992) (Ticor II), on remand, 998 F.2d 1129 (3d Cir.1993) (Ticor III), cert, denied, 510 U.S. 1190, 114 S.Ct. 1292,127 L.Ed.2d 646 (1994). The cases decided since Parker clarify that state action immunity is in the nature of an affirmative defense; the party claiming immunity has the burden of proof. Ticor II, 112 S.Ct. at 2172; Town of Hallie v. City of Eau Claire, 471 U.S. 34, 37-39, 105 S.Ct. 1713, 1716, 85 L.Ed.2d 24 (1985); Federal Maritime Comm’n v. Seatrain Lines, Inc., 411 U.S. 726, 731-33, 93 S.Ct. 1773, 1778, 36 L.Ed.2d 620 (1973); Yeager’s Fuel v. Pennsylvania Power & Light, 22 F.3d 1260, 1267 (3d Cir.1994); Nugget Hydroelectric, L.P. v. Pacific Gas & Elec. Co., 981 F.2d 429, 434 (9th Cir.1992). Under these cases, SoCalGas bears the burden of demonstrating that there are no disputed fact issues material to resolving the application of the state action doctrine and that, as a matter of law, the transport-or-pay clauses in the two contracts were allowed by a clearly articulated and affirmatively expressed state policy and were the result of active supervision by the state. A. The First Prong: A Clearly Articulated and Affirmatively Expressed State Policy The first prong of the Midcal test requires that the state have a “clearly articulated and affirmatively expressed” policy in favor of the challenged restraint. Plaintiffs argue that in 1988, the State of California no longer followed a policy of displacing competition with regulation in the field of natural gas transportation. (Docket Entry No. 14, pp. 16, 19; Docket Entry No. 71, pp. 3-4). Plaintiffs also argue that in Decision 10, the CPUC prohibited take-or-pay clauses, or, alternatively, that Decisions 9 and 10 create a fact issue as to whether the inclusion of transport-or-pay clauses in the contracts violated the CPUC policy then in effect. (Docket Entry No. 59, pp. 22-26). SoCalGas contends that in 1988, the State of California and the CPUC had a policy of regulation displacing competition in the intrastate gas transportation market. (Docket Entry No. 70, p. 32). SoCalGas asserts that Decision 10, which precludes the use of take- or-pay clauses, did not apply to individually negotiated long-term transmission contracts for EOR customers, but rather that such contracts were specifically addressed in Decision 9, which contained no prohibition against take-or-pay clauses. SoCalGas asserts that there is no disputed fact issue and that the first prong of the Midcal test is met as a matter of law. In Midcal, the Supreme Court stated that “the challenged restraint must be ‘one clearly articulated and affirmatively expressed as state policy.’ ” 100 S.Ct. at 943 (emphasis added). This language suggests that the challenged restraint — the inclusion of transport-or-pay provisions in long-term EOR gas transportation contracts with negotiated utilities — must have been clearly articulated and affirmatively expressed as the policy of the State of California. See, e.g., Cost Management Servs., Inc. v. Washington Natural Gas Co., 99 F.3d 937, 942 (9th Cir.l996)(“the relevant question is whether the regulatory structure which has been adopted by the state has specifically authorized the conduct alleged to violate the Sherman Act”). In Cantor v. Detroit Edison Co., 428 U.S. 579, 96 S.Ct. 3110, 49 L.Ed.2d 1141 (1976), decided before Midcal, the Supreme Court required the state policy favoring regulation to be specifically addressed to the challenged restraint. In Cantor, the State of Michigan regulated electric utility rates. The utility company had a policy of providing residential customers new light bulbs at no additional cost. The state public utility commission approved of this practice and mandated that it could not be changed until the tariff was changed. A retail druggist, who sold light bulbs, sued, claiming that the utility was using its monopoly power in violation of the Sherman Act. The Supreme Court held that Michigan did not have an affirmatively expressed policy that the utility company provide light bulbs at no charge. The Supreme Court found that the state policy was to regulate rates, not to provide for light bulb exchanges. Id. at 3119. Since deciding Midcal, the Supreme Court has moved away from such a narrow construction of the state policy requirement. In Southern Motor Carriers Rate Conference v. United States, 471 U.S. 48, 105 S.Ct. 1721, 85 L.Ed.2d 36 (1985), the government challenged the collective ratemaking activities of rate bureaus composed of common carriers operating in four states. The rate bureaus submitted rate proposals to the Public Service Commission in each state. The Supreme Court considered whether a state statute authorizing a state commission to regulate common carriers sufficiently evidenced an intent to authorize collective rate-making. The Supreme Court stated that: [a] private party acting pursuant to an anticompetitive regulatory program need not “point to a specific, detailed legislative authorization” for its challenged conduct. Lafayette v. Louisiana Power & Light Co., 435 U.S. at 415, 98 S.Ct. 1123 (opinion of Brennan, J.). As long as the State as sovereign clearly intends to displace competition in a particular field with a regulatory structure, the first prong of the Mid-cal test is satisfied.... Therefore, we hold that if the State’s intent to establish an anticompetitive regulatory program is clear, as it is in Mississippi, the State’s failure to describe the implementation of its policy in detail will not subject the program to the restraints of the federal antitrust laws. Id. at 1730-31 (emphasis added). The Supreme Court explained that: If more detail than a clear intent to displace competition were required of the legislature, States would find it difficult to implement through regulatory agencies their anticompetitive policies. Agencies are created because they are able to deal with problems unforeseeable to, or outside the competence of, the legislature. Requiring express authorization for every action that an agency might find necessary to effectuate state policy would diminish, if not destroy, its usefulness. Cf. Hallie v. Eau Claire, 471 U.S. 34, 44, 105 S.Ct. 1713, 1719, 85 L.Ed.2d 24 (requiring explicit legislative authorization of anticompetitive activity would impose “detrimental side effects upon municipalities’ local autonomy”). Id. The Supreme Court concluded that where a “State’s intent to establish an anticompeti-tive regulatory program is clear, ... the State’s failure to describe the implementation of its policy in detail will not subject the program to the restraints of the federal antitrust laws.” Id. at 1731. In City of Columbia v. Omni Outdoor Advertising, 499 U.S. 365, 111 S.Ct. 1344, 113 L.Ed.2d 382 (1991), a state statute authorized municipalities to regulate zoning. The plaintiff advertising company challenged municipal regulations limiting where and how many billboards could be posted in the city, asserting that the regulations discriminated in favor of companies who already had billboards in place. Id. at 1348. The Supreme Court held that because the “very purpose of zoning regulation is to displace unfettered business freedom in a manner that regularly has the effect of preventing normal acts of competition,” the regulations met the first prong of the Midcal test. Id. at 1350. The Court reasoned that to require a specific state authorization of the challenged conduct would require federal courts continuously to review state action, explaining that: “[i]f the antitrust court demands unqualified ‘authority’ in this sense, it inevitably becomes the standard reviewer not only of federal agency activity but also of state and local activity whenever it is alleged that the governmental body, though possessing the power to engage in the challenged conduct, has actually exercised its power in a manner not authorized by state law. We should not lightly assume that Lafayette’s authorization requirement die-tates transformation of state administrative review into a federal antitrust job. Yet that would be the consequence of making antitrust liability depend on an undiscriminating and mechanical demand for ‘authority’ in the full administrative law sense.” P. Areeda & H. Hovenkamp, ANTITRUST LAW 212.3b, p. 145 (Supp. 1989). We agree with that assessment, and believe that in order to prevent Parker from undermining the very interests of federalism it is designed to protect, it is necessary to adopt a concept of authority broader than what is applied to determine the legality of the municipality’s action under state law. Id. at 1349-50. In Federal Trade Comm’n v. Ticor Title Ins. Co., the Supreme Court restated the two-part Midcal test and held that while a State may not confer antitrust immunity on private persons by fíat, it may displace competition with active state supervision if the displacement is both intended by the State and implemented in its specific details. 504 U.S. 621, 633, 112 S.Ct. 2169, 2176, 119 L.Ed.2d 410 (1992). The Supreme Court explained that [b]oth [prongs of the Midcal test] are directed at ensuring that particular anti-competitive mechanisms operate because of a deliberate and intended state policy. In the usual case, Midcal’s requirement that the State articulate a clear policy shows little more than that the State has not acted through inadvertence; it cannot alone ensure, as required by our precedents, that particular anticompetitive conduct has been approved by the State. Id. at 2178 (emphasis added) (internal citations omitted). The threshold questions are whether the State of California deliberately displaced competition with regulation and whether the challenged restraint was a part of the field which the State clearly intended to regulate or was a foreseeable consequence of such regulation. In Cantor, although the state’s regulatory scheme authorized rate-setting, product-tying was not a foreseeable consequence of such regulation and was not part of the field of rate-setting. In Southern Motor Carriers, the state regulated rates; the collective rate-making was a foreseeable consequence of such regulation and part of the field of rate-setting. In City of Columbia, the state authorized municipal zoning; regulation of the number and location of billboards was a foreseeable consequence of such regulation and part of the field of zoning. Lower courts applying the Supreme Court cases have precluded challenges to anticom-petitive practices that are the foreseeable results of state authorized regulation or within the field in which regulation has displaced competition. In Cost Management Servs., Inc. v. Washington Natural Gas Co., 99 F.3d 937 (9th Cir.1996) the plaintiff challenged a private utility company’s anticompetitive practices, including off-tariff pricing and tying products and services. The district court had held that the first prong of the Midcal test was satisfied because the state had clearly intended “to displace competition in [the market for sale of natural gas] with a regulatory structure.” Cost Management Servs., 99 F.3d at 942. The Ninth Circuit reversed, holding that the district court had “misapplied the first prong of the Midcal test.” Id. The Ninth Circuit stated: the Supreme Court clarified in Ticor Title that [the first prong of the Midcal test] is satisfied if a plaintiff establishes that ‘the State has articulated a clear and affirmative policy to allow the anticompetitive conduct.’ Accordingly, the fact that Washington may have displaced competition in the market for sale of natural gas with a regulatory structure is not dispositive. Rather, the relevant question is whether the regulatory structure which has been adopted by the state has specifically authorized the conduct alleged to violate the Sherman Act. Id. Although this language suggests a requirement that the state expressly authorize the challenged restraint in its legislative mandate, the Cost Management Servs. holding is consistent with the Supreme Court’s holdings in Southern Motor Carriers and City of Columbia. In Cost Management Servs., the court determined that the state’s grant of authority to the public utility commission to set utility rates did not include a grant of authority to allow off-tariff pricing and product tying restraints. This result is consistent with the Supreme Court cases requiring that the challenged restraint be a foreseeable result of the statutory authorization or part of the “particular field” in which competition has been replaced with a regulatory structure. The Ninth Circuit held that off-tariff pricing and product-tying was not a foreseeable result of rate-setting and are not within the field of rate-setting. In DFW Metro Line v. Southwestern Bell, the plaintiff challenged the defendant phone company’s decision to charge the plaintiff a higher rate for use of the defendant company’s phone lines. The State of Texas had established the Texas Public Utility Commission to regulate the rates of Texas utility companies. The Fifth Circuit held that the state’s clear intent to regulate the rates charged by Texas utilities satisfied the first prong of the Midcal test, explaining that: [w]e have previously held in Metro I that Bell meets the first prong of the Midcal Test. As neither Ticor nor any other Supreme Court decision or subsequent legislation has changed the legal foundation of that holding, we are bound by the law of the case doctrine to follow our finding in Metro I that the Texas system [which established a regulatory system in place of competition] satisfies the first Midcal prong. DFW Metro Line, 988 F.2d at 605. The Fifth Circuit’s recent discussion of the Midcal test in Martin v. Memorial Hosp. At Gulfport, 86 F.3d 1891 (5th Cir.1996) is consistent. In Martin, a doctor challenged a city hospital’s practice of entering exclusive contacts with particular doctors for specific medical services. The Fifth Circuit held that to meet the first prong of the Midcal test, the hospital would have to show “a statutory scheme that demonstrates that the state legislature clearly contemplated the challenged anticompetitive conduct or that suppression of the competition was a foreseeable result of what the state authorized.” Martin, 86 F.3d at 1399. The court explained that: [i]t is not necessary for the state legislature to have compelled or explicitly permitted the hospital to enter exclusive contracts having anticompetitive effects; it is enough if such suppression of competition was the “foreseeable result” of what the state authorized. Id. Because the state had authorized municipal hospitals to enter into exclusive contracts with a single individual to “operate any aspect, division or department of its operations,” the court concluded that the hospital’s practice of entering into exclusive contracts with a doctor for a particular medical service “could have been reasonably anticipated by the [state legislature].” Id. at 1400. Under the first prong of the Midcal test, courts begin the analysis by looking to what the state legislature has authorized. See, e.g., Ticor Title Ins., 112 S.Ct. at 2174 (looking to the state statutes authorizing insurance companies to establish joint rates for its members); City of Columbia, 111 S.Ct. at 1348 (looking to the South Carolina statutes under which the city had enacted limits on billboards); Towm of Hallie, 105 S.Ct. at 1718 (looking to the Wisconsin statutes that authorized a city to regulate waste removal services); Southern Motor Carriers, 105 S.Ct. at 1730 (looking to the Mississippi statutory authorization given to the state public service commission); Midcal Aluminum, 100 S.Ct. at 940 (looking to the California statutes regulating wine producers); Columbia Steel Casting, 111 F.3d at 1486 (looking to the Oregon statutory authorization given to the state’s public utility commission); Independent Taxicab Drivers’ Employees v. Greater Houston Transp. Co., 760 F.2d 607, 610 (5th Cir.1985), cert, denied sub nom., Arrow Northwest Inc. v. Greater Houston Transp. Co., 474 U.S. 903, 106 S.Ct. 231, 88 L.Ed.2d 230 (1985) (looking to the statute which granted municipalities regulatory power over the taxicab industry); cf. Bates v. State Bar of Ariz., 433 U.S. 350, 357-61, 97 S.Ct. 2691, 2696-97, 53 L.Ed.2d 810 (looking to the disciplinary rules adopted by the Arizona Supreme Court); Hefner v. Alexander, 779 F.2d 277, 281 (5th Cir.1985) (looking to the disciplinary rules adopted by the Texas Supreme Court). This court therefore begins the analysis of the first prong of the Midcal test by examining the California legislation creating the CPUC regulatory structure. The court then examines the CPUC regulations and decisions. 1. A Policy of Displacing Competition by Regulation The courts have consistently recognized that the California legislation creating the CPUC regulatory structure constitutes a policy of displacing competition with regulation in natural gas transportation. See, e.g., Nugget Hydroelectric, L.P., 981 F.2d at 435; City of Vernon v. Southern Cal. Gas Co., 92 F.3d 1191, 1996 WL 138554, at *2 (9th Cir.1996); Transphase Sys., Inc. v. Southern Cal. Edison Co., 839 F.Supp. 711, 715-16 (C.D.Cal. 1993); Norcen Energy Resource v. Pacific Gas & Elec. Co., 1994 WL 519461, at *9 (N.D.Cal.1994). In 1988, California had a policy of displacing competition by regulation in the intrastate market for natural gas. Cal. Pub. Util. Code §§ 454-55. (West 1994 Supp.). Plaintiffs contend that the federal attempts to deregulate the interstate natural gas market that began in the mid-1980s, and the CPUC’s responses, establish that the State of California was changing its policy from regulation of the natural gas market to competition. A similar argument was rejected in County of Stanislaus v. Pacific Gas & Elec. Co., 1994 WL 706711, at *24 (E.D.Cal.1994). In County of Stanislaus, the plaintiffs argued that “the CPUC’s current policy of encouraging competition indicates no intent to displace competition with regulation.” 1994 WL 706711, at * 24. The court disagreed. The court reasoned that the “[]Introduction of competition into a regulatory structure does not preclude application of immunity [under the state action doctrine].” Id. Relying on Southern Motor Carriers, the court concluded that the state had clearly intended to displace competition by vesting the CPUC with authority to regulate natural gas utility rates. Id. at *26. There is no evidence that the State of California abandoned its longstanding policy of displacing competition by regulation in the natural gas market in 1988. However, plaintiffs argue that the state action doctrine requires a showing that the regulatory agency established and authorized by the state had a policy of displacing competition with regulation. Plaintiffs contend that beginning in 1986, the CPUC was increasing the level of competition in the California natural gas market in order to compete with increasing interstate competition. It is undisputed that while the CPUC was allowing the natural gas utility companies more flexibility to compete with interstate carriers, the CPUC did so as part of its policy of continuing to regulate the California natural gas transportation market. See, e.g., D. 85-12-102, 20 CPUC 2d 6, 20 (1985) (Docket Entry No. 6, Exhibit 4, p. 20) (allowing the utilities to negotiate individual long term transportation contracts with EOR customers, rather than using tariffs, in order to “provide utilities with the negotiating flexibility required to meet the needs of their EOR customers and to meet the competition of the interstate pipeline proposals”); D. 86-12-009, 22 CPUC 2d 444, 480 (1986) (Docket Entry No. 6, Exhibit 4, p. 480) (“we continue to believe that it.is in the best interest of all California ggs ratepayers that such Kern County EOR gas demand as may exist be served by the California utilities_And we have specifically granted the utilities the flexibility to negotiate higher priority service for EOR customers through non-standard service contracts”; “[the CPUC’s goal is for the California utilities to serve] as much of the EOR market as possible ... [because] unstructured competition in the gas markets will unfairly disadvantage certain gas customers”). The CPUC’s policy of allowing increased competition by the state-regulated utilities was consistent with, and part of, its policy of regulating the California natural gas market. County of Stanislaus, 1994 WL 706711, at * 24. 2. The Challenged Restraint: Transport-or-Pay Provisions The State of California’s authorization of the CPUC evidences a clear “intent that intrastate rates would be determined by a regulatory agency, rather than the market ... [and therefore the] details of the inherently anticompetitive rate-setting process ... are left to the agency’s discretion.” See Southern Motor Carriers, 105 S.Ct. at 1730. Plaintiffs acknowledge that before 1986, the CPUC included transport-or-pay clauses in long-term gas transportation contracts. It is undisputed that the use of transport-or-pay provisions in contracts subject to CPUC regulation and approval were part of the field that the California legislature regulated. The California legislature could have foreseen the use of transport-or-pay provisions as part of natural gas transportation regulation. Martin, 86 F.3d at 1400. Plaintiffs contend that the CPUC had specifically forbidden the use of take-or-pay provisions in gas transportation contracts in Decision 10, issued on December 3, 1986. D. 86-12-010, 22 CPUC 2d at 507-08. SoCal-Gas contends that Decision 10 did not apply to individually negotiated, long-term EOR gas transportation contracts, which were governed by Decisions 9 and 102. This position is supported by the Decisions and by the Resolutions approving the contracts. Decisions 9 and 10 were issued simultaneously. 22 CPUC 2d 444 and 22 CPUC 2d 491; Docket Entry No. 57, Exhibits 5 and 2. Decision 10 states that Decisions 9 and 10 were companion rulings, which “together [would] set forth the final policies to restructure natural gas regulation.” 22 CPUC 2d at 501. Decision 10 established general rules, while Decision 9 detailed specific implementation for particular markets, including the EOR market. 86-12-010; 22 CPUC 2d at 501. Decision 10 states that transport-or-pay provisions should be replaced by demand charges in standard contracts, without regard to whether the contracts were long or short term. Decision 10 also states that “there should be a continuum of contract lengths available to customers. Although the issue of transmission rates is more fully discussed in our companion decision [9], we note that customers mil be allowed to negotiate any combination of contract length and firmness of service, and that the rate for such service will be determined through contract negotiations.” 22 CPUC 2d at 508 (emphasis added). Decision 10 states that transport-or-pay provisions were unnecessary in standard rate contracts, which would use demand charges as substitutes, but that the specifics for particular markets, including the EOR market, were discussed in Decision 9. Decision 9 specifically addresses the unique aspects of the EOR market. In order to enable California’s regulated utilities to serve the EOR market in Kern County, the CPUC was giving the utilities “more flexibility to compete with the interstate pipeline proposals.” 22 CPUC 2d at 480. To accommodate this policy of increased flexibility without surrendering its duty to “protect ratepayers from some of the risks inherent in long-term contracts that offer pricing certainty” and to ensure that the contracts are “consistent with all effective regulations and guidelines,” the CPUC required that it approve every individually negotiated transportation contract that was longer than five years. D. 86-012-009, 22 CPUC 2d at 483. In Decision 9, the CPUC stated that it was important “to provide the utilities with the ability to enter into long-term contracts at predictable rates with EOR customers. Beyond the floor and ceiling price limits we are establishing today, we do not intend to limit the utilities’ ability to negotiate appropriate contract terms and conditions, including contract length, with EOR customers.” Id. (emphasis added). In determining the meaning of these decisions, it is helpful to refer to general rules of statutory construction. Courts should give statutes their plain and ordinary meaning. United States v. Hall, 110 F.3d 1155, 1161 (5th Cir.1997) (citing Bailey v. United States, 516 U.S. 137, 143-45, 116 S.Ct. 501, 506, 133 L.Ed.2d 472 (1995)). Statutes should be read as a whole, so that each section of the statute is given meaning. Hightower v. Texas Hosp. Ass’n, 65 F.3d 443, 448 (5th Cir.1995); Forsyth v. Barr, 19 F.3d 1527, 1543 (5th Cir.), cert, denied, 513 U.S. 871, 115 S.Ct. 195, 130 L.Ed.2d 127 (1994). A specific statutory provision governs a general one. See Morales v. Trans World Airlines, Inc., 504 U.S. 374, 383-85, 112 S.Ct. 2031, 2037, 119 L.Ed.2d 157 (1992); Kirby Corp. v. Pena, 109 F.3d 258, 270 (5th Cir. 1997). Decisions 9 and 10 make it clear that Decision 9 was the more specific regulation. Decision 9 clearly states that utilities were free to negotiate individual contracts for long-term EOR transportation service, with few limitations. The plain language of Decisions 9 and 10 is consistent with SoCalGas’s position that Decision 10’s preclusion of transport-or-pay provisions was not to apply to individually negotiated long-term EOR gas transportation contracts. 22 CPUC 2d at 481. In the Resolutions approving the contracts at issue, the CPUC notes that the transport- or-pay provisions would function as a substitute for demand charges. Cal.P.U.C. Resolution No. 2821 at 3. This is consistent with the language of Decision 9. In Decision 9, the CPUC stated that demand charges would be included as one element of the transmission charge for “tariffed rate default customers.” 22 CPUC 2d at 472-73. The CPUC also stated that utilities would “have the most rate flexibility” in determining transmission charges for “noncore contracting customers.” Id. at 473. In its amicus brief, the CPUC states that “[t]he statements in Decision 86-12-010 ... [were] not applicable to individually negotiated long-term contracts, which were authorized and governed by Decisions 85-12-102 and 86-12-009.” (Docket Entry No. 38, p. 6). Plaintiffs contend that the summary judgment record raises a fact issue as to whether CPUC policy in effect in 1988 permitted the use of transport-or-pay provisions in individually negotiated long-term EOR contracts. (Docket Entry No. 59, pp. 19-20). Plaintiffs submitted an affidavit from Stanley Hulett, who served as CPUC commissioner from May 1986 to January 1991 and CPUC president from January 1987 to December 1988, stating as follows: In July 1988, the CPUC was opposed to the use of transport-or-pay provisions in long-term contracts between the utilities and the EOR operators. This position was articulated, as well, in Decision 86-12-010, which was the Commission’s major decision which led to the restructuring of the California natural gas industry. Having dealt with the impact of the [FERC] decisions regarding take-or-pay, the CPUC was determined to avoid the problems created by the required pass through of such obligations, as it related to EOR contracts. (Docket Entry No. 39, Exhibit 1, ¶¶ 5-7). Hulett subsequently withdrew this affidavit, stating that he had been mistaken because he had failed to separate contracts serving the EOR market from other types of contracts in his discussion of the transport-or-pay provisions. (Docket Entry No. 65, Exhibit 1, pp. 62-64). The court allowed plaintiffs to depose Hulett. Stanley Hulett testified in his deposition that Decision 10 did not apply to individually negotiated EOR contracts and the transport-or-pay provisions were necessary to maintain a minimum contribution because the EOR customers would receive a discounted rate through such contracts. (Docket Entry No. 57, Exhibit 5, pp. 24, 551-53,105-06). Donald Vial, a former CPUC Commissioner, testified in his deposition that the contracts at issue were governed by Decision 9 and Decision 12 together; were special contracts, dealt with separately from standard tariff contracts; and the transport-or-pay provisions were necessary to maintain a minimum contribution because plaintiffs were receiving an. otherwise discounted rate by individually negotiating the contracts. (Docket Entry No. 57, Exhibit 7, pp. 28-29, 35-36, 77-78). Plaintiffs’ evidence of the recollections, seven years later, of subjective interpretations of CPUC' policy by individual former CPUC officials, do not raise a fact issue as to whether the CPUC policy forbid the iise of transport-or-pay provisions in individually negotiated EOR transportation contracts. “Immunity is conferred by the official actions of state government, not by the subjective intentions of state officials.” Columbia Steel Casting Co. v. Portland Gen. Elec. Co., 60 F.3d 1390, 1398 n. 8 (9th Cir.1995). The Resolutions approving the contracts with the transport-or-pay provisions are the CPUC’s official actions implementing its decisions. Cf. INS v. Cardoza-Fonseca, 480 U.S. 421, 446-48, 107 S.Ct. 1207, 1221, 94 L.Ed.2d 434 (1987); Hamdan v. INS, 98 F.3d 183, 184 (5th Cir.1996); Consarc Corp. v. United States, 71 F.3d 909, 915 (D.C.Cir. 1995). The CPUC’s official actions show that Decision 10 did not apply to individually negotiated long-term EOR contracts. Cal. P.U.C. Resolution No. 2821, p. 7; Cal.P.U.C. Resolution No. 2822, p. 7; Docket Entry No. 38. The CPUC’s approval of transport-or-pay provisions in the individually negotiated long-term EOR contracts is not clearly inconsistent with Decisions 9 and 10. While Decision 9 states that transport-or-pay provisions are prohibited in default tariff rate contracts, where demand charges will be used, individually negotiated EOR contracts, specifically addressed in Decision 9, had few, but specifically addressed, limits. 22 CPUC 2d at 471; Docket Entry No. 6, Exhibit 4, p. 471. The CPUC’s official action, evidenced in the Resolutions, is not an unreasonable interpretation of, or clearly forbidden by, the CPUC’s own regulations and decisions. Plaintiffs also submit an internal SoCalGas memorandum written by its in-house counsel, Joan LeSage, two weeks after the CPUC issued Decisions 9 and 10. The LeSage memorandum states: Attached is a revised transportation contract to be filed in conjunction with the revised long-term EOR transportation tariff required by D-86-12-010.... [References to the take-or-pay have been deleted. (Docket Entry No. 60, Exhibit 21, p. 1). SoCalGas responds that the LeSage memorandum addressed proposed “general terms and conditions” which would be used for both long-term individually negotiated contracts— in which transport-or-pay provisions were permissible — and for standard tariff rate contracts — in which transport-or-pay provisions were disallowed. (Docket Entry No. 64, p. 9). Because the boilerplate language would be placed in all contracts, the transport-or-pay provisions were necessarily eliminated to conform with the more stringent standards set out for the default tariff contracts. Plaintiffs also note that another regulated utility, PG & E, did not include transport-or-pay provisions in their contracts. Plaintiffs submit the internal memorandum of Dan Douglass, in-house counsel for SoCal-Gas, which acknowledges this fact. (Docket Entry No. 60, Exhibit 6). Douglass wrote that: [w]hat PG & E has done with these contracts is to establish a long-term agreement structure which strictly adheres to the CPUC’s OII/OIR format of charges.... [Tjhere is no take-or-pay provision. As you are aware, our GLT contract includes a 50% take-or-pay. No take-or-pay appears to put PG & E in the position to potentially lose these customers to an interstate pipeline if one is built. (M). The fact that another utility company did not include transport-or-pay clauses in its individually negotiated long-term E