Although the physical reworking of storage wells will go on through the winter, Southern California Gas Co. on Thursday began crediting some of its poorest retail customers with low-cost supplies being mined from its so-called "cushion" supplies used to maintain ideal pressures at two of its underground storage fields.
Along with other measures made effective last month, the nation's largest gas utility has put in place regulator-approved emergency programs to help customers mitigate the impact of high wholesale gas prices these next four months.
About 4 Bcf of cushion, or base gas, supplies with a book value of about $1.5 million are being freed up, according to the California Public Utilities Commission, which approved the special deviation in the utility's normal underground storage operations as part of an effort to help low-income customers enrolled in the statewide California Alternate Rates for Energy (CARE) program.
As a result, SoCalGas estimated that the thousands of added CARE-eligible customers this winter will collectively avoid nearly $48 million in natural gas billing charges because the gas that carries a cost well below today's skyrocketing wholesale prices because it was long-ago pumped deep into the storage fields to build pressure for smoother withdrawal of other, more recently injected supplies.
In addition to approving the storage diversion at its Nov. 18 meeting, the California Public Utilities Commission in October approved three other initiatives by the Sempra Energy gas-only utility: (1) streamlining the CARE enrollment process and expanding outreach efforts to sign up customers; (2) increasing the installation of low-efficiency natural gas forced-air furnaces with up-to-date high-efficiency units in eligible low-income households; and (3) instituting an expanded natural gas hedging plan for this winter and dedicating a part of it as price insurance for CARE customers.
A SoCalGas spokesperson said the utility has begun the redrilling of some natural gas wells at its two underground storage fields. "By withdrawing low-cost natural gas this winter to serve customers, SoCal can avoid buying an equivalent amount of natural gas at high prices," said the spokesperson, noting that avoided purchasing is what is estimated to equate to $48 million in savings.
SoCalGas Senior Vice President Anne Smith commended the CPUC for what she said was "expedited review" of the cushion gas program. It had only been proposed to the regulators a month earlier at a special meeting on high winter gas bills held in Los Angeles in early October (see NGI, Oct.10).
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