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PG&E Eyes Added Gas Storage Capacity as Part of Procurement Plan

As part of the second phase of an ongoing statewide natural gas regulatory proceeding, Pacific Gas and Electric Co. earlier this month asked California regulators for approval to expand its injection and withdrawal capacities in natural gas storage for its gas procurement program covering core customers. The objective by the utility is to increase its ability to respond to extreme peak demand situations.

The utility's procurement unit wants to expand its firm storage rights to cover what they consider a peak-day, "one-in-10-years" occurrence, compared with the current rights that cover a one-in-four-years occurrence, said an official with the PG&E gas buying operations, which operate separately from the utility's California gas operations.

"We feel we need a more conservative approach to our peak demand coverage, so we're asking for the authority to hold more firm storage assets," said the PG&E utility official. As such, the utility would like an added 100 MMcf/d of firm storage withdrawal, and an additional 2-3 Bcf of firm storage capacity.

Action by the California Public Utilities Commission is expected before the end of this year, and the utility hopes to have some expanded storage rights in place by this time next year, the utility official said.

Part of the filing to the CPUC anticipated a request-for-offers (RFO) solicitation that would include the two merchant storage fields in Northern California -- Lodi and Wild Goose -- as well as the PG&E California transmission pipeline operation.

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