ALJ Rejection Forces Western to Rethink CA Pipe Plan
Western Gas Resources said last week it is weighing its options
in the wake of a judge's rejection of its proposed pipeline bypass
of Pacific Gas & Electric Co. Administrative Law Judge Andrea
Biren recommended regulators approve the gas utility's motion to
reject Western's application, and reject a contention by Western
that PG&E was engaging in anti-competitive behavior. The
judge's recommendation is scheduled to be considered by the
California Public Utilities Commission Oct. 7.
Western said it is re-thinking its arguments and strategy, which
previously were focused on converting an existing Shell-Mobil
proprietary gas gathering and delivery pipeline system into a
regulated intrastate pipeline.
"We're still trying to decide what we are going to do in
response to the CPUC process for making comments," said Craig
Supplee, Western's business development director in Denver, adding
that his company has not determined yet whether it would exercise
its option to buy the pipelines as an unregulated venture. "We're
not really commenting at this time on what we're going to do in
those rebuttals. We'll just have to see what happens."
The ALJ's proposed decision stresses that the CPUC has no policy
allowing local gas transmission and distribution competition, and
therefore, Western's filing does not conform to the current policy.
The proposed decision, however, does not preclude Western from
re-filing so it conforms to the current policy and waiting until
the CPUC's "ongoing investigation into restructuring the natural
gas industry reaches a conclusion with regard to local transmission
and distribution competition that would allow the type of
competition in which [Western] wishes to engage."
If the CPUC agrees with the ALJ and dismisses the filing, it
should also deny Western's complaint about the PG&E utility's
alleged anti-competitive behavior, according to a separate proposed
decision by ALJ Biren.
Through a subsidiary, WGR California, Western proposed to buy
170 miles of two-inch- and 10-inch-diameter pipelines crossing more
than a dozen local gas fields in northern California to eventually
serve the growing industrial load in North Contra Costa County in
the East San Francisco Bay area. The pipeline would interconnect
with PG&E's gas utility transmission backbone pipeline system
and move up to 70 MMcf/d to industrial customers in Pittsburg and
Martinez, CA. The merchant power plant developer, Calpine Corp.,
has plans for two generation plants in Pittsburg and is supporting
Western Gas Resources' CPUC filing.
Richard Nemec, Los Angeles
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