Pacific Gas and Electric Co. late Friday announced it had reached a settlement with all parties on natural gas transportation and storage costs covering 2008 through 2010. The settlement must be approved by the California Public Utilities Commission (CPUC), and the utility said it expects action before the end of this year.

The settlement would continue the Gas Accord market structure that PG&E initiated in 1998 under a "Gas Accord IV" agreement, setting the transportation/storage rates for all of the utility's natural gas residential and business customers.

Parties joining in the settlement include The Utility Reform Network; (TURN); the CPUC independent unit Division of Ratyepayer Advocates (DRA); power plant operators; gas producers/suppliers; business groups representing commercial/industrial customers; independent storage operators; and the California Department of General Services, which buys gas for the state's major facilities.

PG&E said that if the deal is approved by the CPUC, the impact on rates will be "minimal" -- bundled residential gas rates will increase by 0.5%, and bundled rates for small and large commercial customers will increase slightly 0.6%. A typical residential natural gas customer's bill would increase 33 cents/month.

"It is an extraordinary all-party settlement that will provide continued gas transmission and storage system rate certainty and stability," said Bob Howard, PG&E utility vice president for transmission and distribution.

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