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CPUC Quietly Closes Natural Gas Investigations and Challenges

Without discussion, the California Public Utilities Commission (CPUC) Thursday put an end to long-standing challenges by Southern California Edison Co. to operations and wholesale pricing by Southern California Gas Co. (SoCalGas) for supplies it distributes to Edison and other major customers in the southern half of the state. The CPUC also dismissed petitions for modification of the SoCalGas restructuring case that was finalized late last year with the adoption of a new system of firm access rights on the utility's transmission system.

This brings to a close a six-year period of court and regulatory hearings that alleged SoCalGas, affiliate San Diego Gas and Electric Co., parent company Sempra and others conspired to drive up wholesale natural gas prices at the Arizona border in the midst of the state's energy crisis in 2000-2001. A court settlement in a state Superior Court in San Diego last June led to a separate settlement between the Sempra utility and Edison (see Power Market Today, June 27, 2006).

The CPUC action was part of approving en masse more than 30 so-called "consent agenda items." The regulators closed five Edison-SoCalGas cases and the investigation into challenges to the SoCalGas transmission/storage system restructuring.

Last year Edison dropped its opposition to the court-approved settlement of a class action lawsuit against Sempra and its utilities and reached its own separate settlement with SoCalGas that was approved by the CPUC last September. Thursday's action formally brings to a close years of regulatory and court wrangling among the utilities and other stakeholders regarding the use of the utility's transmission/storage system and its impact on Southern California border prices during the energy crisis.

As a result of the deals last year, SoCalGas made various changes in its storage and backbone gas transmission pipeline operations to make them more transparent for large shippers, such as Edison, and that is what the state regulatory commission has now made final.

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