California regulators have given the green light to continueindefinitely the three-year-old incentive gas buying program atSouthern California Gas Co., dispensing at year-end 1998 with anannual review of the program, which has even drawn praise from theusually critical Office of Ratepayer Advocates (ORA) at theCalifornia Public Utilities Commission. The program reportedly hassaved millions of dollars for SoCalGas’ smallest customers who relyon the utility to buy their supplies.

In 1998, SoCalGas reports earning a $2 million award for itsshareholders for the latest 12-month operations of its so-called”Gas Cost Incentive Mechanism.” Based on benchmarked market pricesif SoCalGas can do significantly better than the market average,resulting in quantifiable savings for its merchant customers, partof those savings flow back to its shareholders, who in this caseare owners of the SoCal parent, Sempra Energy.

Shareholders have earned $16 million in rewards through theincentive gas-purchase program over the past three years, accordingto SoCalGas. The most recent award was smaller and more difficultto come by, according to SoCalGas sources, because of 1998’sdifficult market conditions and recent regulatory rulings that madeearning the rewards more difficult.

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