NGI The Weekly Gas Market Report / NGI All News Access

ALJ Rejection Forces Western to Rethink CA Pipe Plan

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

©Copyright 1999 Intelligence Press, Inc. All rights reserved. The preceding news report may not be republished or redistributed in whole or in part without prior written consent of Intelligence Press, Inc.

Comments powered by Disqus