PG&E Hangs on By a Thread, Still Desperate for Gas Supply
Despite the nine natural gas suppliers who bellied up to Pacific
Gas & Electric's bar last week after the federal emergency
order expired, the utility still faces "the possibility of a severe
gas supply crisis."
Either more suppliers must step forward or the state will have
to order neighboring LDC, Southern California Gas to provide
emergency help, according to PG&E utility CEO Gordon Smith. In
a letter to the California governor Smith outlined the situation.
"We are withdrawing approximately 600 MMcf/d of gas from storage
(last Wednesday) in order to meet current demand of 1.8 Bcf/d. We
have been able to purchase approximately 1.1 Bcf/d of flowing
supplies, and we obtained the remaining supplies from a 'parking'
arrangement worked out last weekend in Canada, when temperatures
here were unseasonably warm.
"Our gas storage inventory is now approximately 38 Bcf. We
project that we will deplete storage down to 22 Bcf by mid-March.
This is the minimum level we believe we must retain in storage in
order to meet demands for gas next winter."
State regulators last Thursday postponed ruling on a
two-week-old PG&E request for the emergency supplies from
SoCalGas, something the latter utility is strongly opposing. That
same day, however, three other suppliers - TXU Canada, TXU Houston
and Williams - agreed to continue supplying gas, giving PG&E
nine new contracts among its 40-odd prospective suppliers under a
new arrangement in which the utility's retail gas revenues provide
security they will be paid.
Those who signed on earlier include: BP Energy, Texaco Natural
Gas, Dynegy Marketing and Trade, Texaco Canada Petroleum, Dynegy
Canada Marketing and Trade, and El Paso Merchant Energy.
Richard Nemec, Los Angeles
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