SoCalGas to Provide PG&E with Added Supplies in March
Southern California Gas Co. agreed last week to provide up to 30
MMcf/d to its Northern California gas utility counterpart, Pacific
Gas & Electric, as long as unpaid balances never exceed $16.5
million for the supplies. The deal runs through March 31.
PG&E's gas utility had asked the California Public Utilities
Commission late in January to order SoCalGas to provide emergency
supplies to the San Francisco-based utility's core gas customers,
but SoCalGas strongly objected. CPUC hearings were held and a
proposed decision is scheduled to be considered March 7 by
SoCalGas Chairman Ed Guiles said his company hopes to be "part
of the solution" to California's energy crisis. "PG&E's problem
is not a lack of natural gas; it is a lack of credit," said Guiles.
"We are providing the assistance we can, but our priority must be
in providing reliable service to the 18 million people we serve, as
well as maintaining the financial health of our company."
Guiles said the contract should not adversely impact supplies or
costs for any of SoCal's five million customers. SoCalGas, whose
credit has not been adversely affected by either the electricity
crisis or the wholesale natural gas price spikes this fall and
winter, essentially will be a purchasing agent for PG&E's
utility. It intends to buy supplies from the Pacific Northwest and
have them transported over PG&E's own interstate pipeline
system, PG&E Gas Transmission --- Northwest.
But PG&E said it still is not dropping the emergency filing
as a result of this deal. A PG&E spokesperson said the company
has only about 60% of its projected average daily requirements of 1
Bcf/d assured in contracts, including the new deal with SoCalGas,
which is the 14th contract among more than two dozen possible
suppliers that provided volumes prior to the utility's
creditworthiness becoming an issue. Because of this shortfall and
the need for more supplies as backup, PG&E will continue to
pursue the emergency order at the CPUC, said PG&E's Staci
"We need a lot more back-up," she said, noting that the SoCal
deal, "while welcome," is relatively small compared to the
company's projected needs in March to serve its core loads.
PG&E in a CPUC Feb. 16 hearing said it had sufficient
supplies for the rest of the winter as long as seasonal
temperatures do not drop much below historical levels. Earlier in
the winter because of creditworthiness problems from the electric
side of its business, major gas suppliers were refusing to extend
short-term supply without payment in advance. Both federal and
state actions were needed to keep adequate supplies flowing to
Richard Nemec, Los Angeles
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