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Southwest Gas Shutoff Aftermath Lingers

While federal and state officials have rehashed and are still studying the details, the severe freeze and resulting natural gas customer shutoffs last February in the Southwest have left local distribution utilities to deal with rancor in communities in which both homes and businesses were affected. One small town, Bernalillo, NM, has sued its local utility.

Since he testified at a congressional hearings in Albuquerque at the end of February, Bernalillo Mayor Jack Torres has expressed frustration and disdain toward New Mexico Gas Co., telling news media he feels the utility "stepped on" his rural town about 20 miles north of Albuquerque. The town on March 21 filed a lawsuit against the Continental Energy Systems utility, alleging that it failed to provide adequate gas supplies or adequate advance warnings of the shutoffs caused by the severe weather.

Bernalillo's residents and businesses were among the 28,000 outages experienced by New Mexico Gas customers. In all, some 40,000 retail gas customers experienced shutoffs in New Mexico, with thousands more in certain areas of southern Arizona.

Bernalillo's action comes within two weeks of the New Mexico legislature launching an investigation of the outages (see Daily GPI, March 15), and within a few weeks of a public hearing on the outages conducted by the Arizona Corporation Commission, which heard from the interstate pipeline suppliers and Las Vegas, NV-based Southwest Gas Corp., whose customers experienced similar shutoffs.

Southwest Gas outages were concentrated in the areas in and around Tucson and Sierra Vista. Many customers were without service for two to three days, a Southwest Gas spokesperson told NGI. In total, about 19,000 shutoffs occurred -- 14,500 in the Tucson area and 4,500 in Sierra Vista.

Calling it a combination of multiple factors, Southwest Gas CEO Jeffrey Shaw said "the delivery of natural gas to Southwest Gas' distribution system was severely limited due to extreme weather conditions and rolling power outages in Texas." Shaw wrote ACC Chairman Gary Pierce to give the utility's side prior to a March 2 hearing in Phoenix that highlighted the lack of natural gas storage in the state as one contributing factor.

"Since gas storage is currently unavailable in Arizona, it is not clear how its existence would have impacted the Feb. 3 service outages," Shaw told the ACC chairman. "Any beneficial impact would be a function of the location of the facility, its delivery capabilities and its interconnections with Southwest Gas' distribution system."

In late February at the U.S. Senate Energy and Natural Resources Committee hearing, Bernalillo's Torres said his town had "no confidence" in New Mexico Gas Co., characterizing the utility's attitude toward Bernalillo as "condescending; and [the utility] stepped on my city." The utility's performance worsened during the crisis, said Torres, who alleged that the utility personally berated him at times during the ordeal. Alice Lucero, the mayor of Espanola, NM, echoed the criticisms of the utility's response to the severe freeze, as did New Mexico U.S. Sen. Tom Udall (D-NM) (see Daily GPI, Feb. 23).

For its part the utility holding company CEO contended that the curtailments would not have been necessary if upstream disruptions to gas supplies had not happened. In the end the interstate pipelines' ability to put added supplies into their system combined with record high demand made it impossible for the shutoffs to be avoided, according to El Paso Natural Gas and Transwestern Pipeline officials.

Nevertheless, in its lawsuit Bernalillo is asking for the court's certification of a class action suit on behalf of other municipalities and counties where service was interrupted. Mayors in Espanola and Taos told local news media earlier in March that they were considering what action, such as the lawsuit route, that they may take.

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