PG&E Attempts to Block Western's Pipeline Plan
Pacific Gas and Electric is attempting to block Denver-based
Western Gas Resources' plans for moving into a heavily
industrialized part of the utility's East San Francisco Bay service
territory by converting a proprietary gas pipeline to a
state-regulated, open-access supply line serving proposed new
merchant power plants in Pittsburg, CA, along with surrounding
large industrial loads.
A ruling from a California Public Utilities Commission
administrative judge (ALJ) on the PG&E utility's request to
dismiss Western's application has been delayed, but is now expected
some time in September. In the meantime, the two merchant power
plants, both of which are slated to be developed by Calpine Corp.,
are planning to hook into PG&E's transmission system, according
to a San Jose, CA-based Calpine spokesperson.
At stake in the ALJ's ruling is whether Western is going to be
permitted to exercise its option to purchase a Shell-Mobil gas
gathering and pipeline delivery system, including 170 miles of
two-inch- and 10-inch-diameter pipelines crossing more than a dozen
local gas fields between Sacramento Airport north of the capital
and the industrialized north Contra Costa County area in northern
California. Western earlier this year projected wrapping up the
deal by the end of this year. Now that is in doubt, according to
Western's Denver-based officials.
"We expected something from the CPUC a month ago," said Craig
Supplee, Western's business development director. The assigned ALJ
indicated she has circulated a draft proposed ruling that is now
being reviewed internally at the CPUC, and it is "out of my hands."
Supplee said the PG&E action is a "stalling tactic" in which
the large utility has submitted a long list of arguments why the
project should be rejected, including an 1896 ruling from state
regulators upholding PG&E's exclusive franchise throughout
Western, through a subsidiary called WGR California, is
proposing to buy the pipeline, interconnect it with PG&E's
existing intrastate backbone transmission system and transport
supplies of up to 70 MMcf/d to the industrial customers in the
Pittsburg and Martinez, CA, area. Eventually, Supplee sees the two
new power plants, which are located adjacent to the pipeline, as
potential customers, although until the regulatory process is
completed Western has had to hold off pursuing any deals.
"We've done a lot of hand shaking with the local producers,
telling them what we want to do, but that's about all," Supplee
said. "Once we get the pipe, the power plants definitely will be
prospective customers. In fact, they could fill the pipe
instantaneously. So they are definitely going to be part of the
open season for customers."
Richard Nemec, Los Angeles