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SoCal Signals Transportation Changes

SoCal Signals Transportation Changes

The nation's largest gas distributor, Southern California Gas, earlier this week signaled a possible future change in the way its customers access intrastate transmission during oral arguments at the CPUC on future changes in California's gas industry. In addition, for the first time, a number of the 19 major participants in the state's gas restructuring proceeding suggested a settlement process might be adopted to resolve some controversial issues.

The three current holdover members of the five-member California Public Utilities Commission, now must decide whether to begin preparing recommendations to the state legislature, which could consider drafting a law for the final gas industry changes similar to what it did in 1996 to restructure the electric industry. CPUC President Richard Bilas told NGI he personally does not think a new state law is needed to make the remaining changes to the state's gas industry. Labor unions, however, already have proposed state legislation this year to prevent wider gas unbundling.

A major change that could occur without legislation was presented by SoCalGas. It indicated it would be willing to consider firm capacity rates at receipt points along its several thousand miles of intrastate transmission pipelines. The change would be similar to what Pacific Gas and Electric Co. offers on its intrastate transmission system in central and northern California. Currently SoCal's transportation system uses "windows" and doesn't allow customers to hold capacity rights, as PG&E does on its system.

Under its Gas Accord, PG&E has "tradable rights" like the interstate pipelines in which you essentially buy a piece of the space for transporting gas in the pipeline. "SoCalGas doesn't have that system," noted a CPUC staff member assigned to the gas restructuring proceedings. "A customer pays them to move gas and nominate into [SoCal's] system and the utility tells the customer if it has space to move it or not. A customer doesn't have any 'rights' on the SoCal transmission system." The change suggested by SoCalGas in the recent CPUC proceeding is a "fairly major step," according to the CPUC staff member, who also characterized as new the notion of pursuing a settlement among the parties as proposed by Enron and supported by a number of other participants in the case.

The major interest stakeholders in the state's gas industry have had their say in the regulatory arena, and now it is up to the regulators to decide how the process unfolds from here, said the CPUC staff member close the proceedings. The ball definitely has now been tossed to the CPUC's court.

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