CPUC Examines Unbundling SoCalGas Transmission, Storage

In light of "gaming" of natural gas wholesale prices at the California-Arizona border and ongoing pipeline constraints, the head of the California Public Utilities Commission last Wednesday said she and her fellow regulators are looking to go farther than several current proposals for unbundling the intrastate transmission and storage services of Southern California Gas Co.

"There are actions that the [regulatory commission] can take over time to boost gas capacity at Wheeler Ridge, Topock and other places, however my colleagues have asked for this item to be held [on the May 3] agenda so an all-party meeting can be held to hear everyone's concerns and issues regarding how quickly we can get more natural gas capacity on line and expand various (hub) points," said CPUC President Loretta Lynch during a press briefing.

A request from early this year by Pacific Gas and Electric Co. to force SoCalGas to provide emergency supplies to PG&E core gas customers will be withdrawn by PG&E, said Lynch. She called it one of the "unrecognized success stories" in California's continuing energy crisis because it means efforts by the regulators and utility to shore up threatened gas supplies have produced a positive outcome.

"We'll have a fuller briefing on the withdrawal, but I do think this highlights one of the success stories of recent months," Lynch said. "I believe PG&E believes this proposed order is no longer necessary as it has secured adequate natural gas supplies."

While noting that various gas and utility financing issues will be dropped or postponed, "one of the most significant" expected actions, Lynch said, should be the authorization of more than $100 million in energy efficiency programs for low-income customers as part of the regulators' implementation of parts of Gov. Gray Davis' $850 million energy conservation push.

In light of a lack of help from federal sources, Lynch said it is "critical that Californians pull together" to cut their energy use up to 20% as a means of driving down the continuing high wholesale power prices. "We've pulled out all the stops, and one of the key stops that cannot be ignored is conservation and energy efficiency."

Lynch once again took several swipes at the Federal Energy Regulatory Commission for what she describes as the federal regulators' inaction on the "gaming" going on in California's natural gas market, which she says has saddled the state with the highest wholesale gas prices in the nation, further driving up electricity costs because of the state's heavy reliance on natural gas-fired electricity.

"Californians pay more for natural gas that comes from other states than virtually any other state," Lynch said. She said that has been the case since last December, although the higher prices are "for no good reason."

In light of this, Lynch said that the CPUC will continue to delay a decision on the so-called competing "settlements" for SoCalGas' more than two-year-old unbundling case so the regulators can consider going further in mandating more capacity expansions by the nation's largest natural gas distributor at key connection points, such as Wheeler Ridge and Topock.

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