Although they deferred action until next month, California regulators Thursday spent considerable time discussing the deployment of advanced natural gas utility metering systems and the fate of a gas-fired generation plant in Northern California that the state's grid operator claims is essential to reliability. Advocates for the smart gas meters contend that they are essential for upgrades to pipeline system safety.

In unusually long and open discussion on pending orders, commissioners on the five-member California Public Utilities Commission (CPUC) split roughly between the two senior members of the panel and their three colleagues who were appointed last year by Gov. Jerry Brown. The newcomers are questioning the $1 billion Southern California Gas Co. (SoCalGas) program to shift to smart meters as the last of the state's major investor-owned utilities to do so, and balking at having the major power utilities sign a long-term power supply deal with Calpine Corp.'s gas-fired Sutter Plant north of Sacramento.

In regard to the advanced meters, two years after the commission authorized SoCal Gas's program it has still not begun, and Commissioner Mike Florio asked to hold up a vote on requests to stay the past approvals. That caused CPUC President Michael Peevey and the CPUC's other veteran commissioner, Timothy Alan Simon, to criticize any attempt to undo the previous decision as requested by the CPUC's independent consumer unit, the Division of Ratepayer Advocates (DRA), and outside utility consumer watchdog, The Utility Reform Network (TURN).

"I can't understand why anyone would want to undo the past decision," Peevey said. "If the meters were cost effective two years ago, they are even more cost effective today." He added that the other major private-sector gas utilities -- Pacific Gas and Electric Co. and San Diego Gas and Electric Co. -- already have installed smart gas meters, to leave out SoCalGas would create "a gaping hole in our smart grid program."

With natural gas prices at record lows, Peevey argued further that "now is the prudent time to do the upgrade" in SoCalGas's more than five million meters. The added cost for ratepayers is estimated to be less than $2/month, he said. The meters are also key to the gas-only utility's upgraded pipeline safety program going forward, he added.

"We need these meters to ensure the very best safety," Peevey stressed.

Simon, who chairs the natural gas committee at the National Association of Regulatory Utility Commissioners (NARUC), said he was opposed to any delay in completing the state's transition to smart meters. "This decision was already voted out, and it is time to move on with ensuring the safety of California's distribution and transmission pipeline system," Simon said.

Even hydraulic fracturing (fracking) and the shale gas boom filtered into discussions when Simon was reporting on recent meetings he had with NARUC in Washington, DC, reminding his colleagues of California's long history with fracking going back 50 years in the reinvigorated Monterey Shale.

On the Sutter Power Plant issue, Florio, who was appointed to the regulatory panel after 30 years as a regulatory attorney for the consumer group TURN, questioned whether the CPUC directing the state's major utilities to contract with Calpine's plant for future supplies was perhaps an example of the state regulators participating in "crony capitalism."

Peevey and Simon, along with the other two commissioners, Catherine Sandoval and Mark Ferron, leaned toward passing the resolution that would pave the way for the power utilities to sign 10-year deals to take parts of the Sutter plant's output. Without this deal, it was feared by the California Independent System Operator (CAISO) that the combined-cycle gas-fired plant would be idled while several much older less efficient gas plants in the East San Francisco Bay Area would continue to operate to satisfy CAISO reliability needs.

The contract and the SoCalGas smart meters are expected to be voted on by the CPUC March 8.

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