PG&E Settlement Approved; SoCal Still Stalled
California regulators approved a settlement last week dealing
with Pacific Gas and Electric's imbalance procedures and
operational flow orders (OFO). The California Public Utilities
Commission (CPUC) however, did not act on the much tougher issues
included in the proposed interim and comprehensive settlements
filed earlier this year by Southern California Gas.
No specific dollar-value was placed on the OFO settlement, but
the various stakeholders all realize cost-savings, according to
CPUC Commissioner Richard Bilas, the assigned commissioner in the
gas restructuring proceedings. Among the stakeholders agreeing to
PG&E's gas utility settlement were marketers, shippers,
suppliers, wholesale and retail customers, storage operators and
Bilas noted that the PG&E settlement is "broad-based" and
will help the state regulators avoid a lot of time and money
holding administrative hearings on the issues, such as the
complicated way imbalances on the pipeline system are handled with
According to the settlement, OFO noncompliance charges are
lowered from 10 cents/therm to 2.5 cents/therm, and shippers with
monthly charges of less than $1,000 are exempted from the
noncompliance charges. The agreement aims at lessening the number
of systemwide OFOs that are inconvenient and costly to all
customers on the system.
Also under the agreement non-core customers may choose to
balance their supplies and deliveries on a daily basis, instead of
monthly, and may receive a credit for doing so; electronic trading
systems will be developed to trade monthly and OFO imbalances and
secondary market pipeline capacity; greater storage flexibility
will be available for Core Transport Agents (CTA) which purchase
gas for specified groups of residential or small business
customers; and new pilot programs will be established for customers
to acquire their own meters and meter add-on devices.
"I wish this [same broad-based settlement] would occur in
Southern California," Bilas said. California's long-delayed natural
gas industry restructuring effort has lasting more than two years.
Last July, the CPUC ordered PG&E and SoCal Gas to seek
negotiated deals on major issues affecting the further unbundling
of their extensive transmission and storage operations.
Many of the tougher issues for the PG&E system had been
addressed in its earlier adopted Gas Accord, but SoCalGas began
more from scratch, and hence, it has had less success in gaining an
Richard Nemec, Los Angeles
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