Traditional allies find themselves knocking heads at the California Public Utilities Commission (CPUC) over a proposal by Sempra Energy's Southern California Gas Co. (SoCalGas) utility to establish a special compression tariff and services for natural gas vehicle (NGV) fueling stations. Seal Beach, CA-based Clean Energy Fuels Corp. is alleging that the SoCalGas plan is anti-competitive.

There are actually two fights ongoing -- both pitting former SoCalGas executives now with Clean Energy against the nation's largest monopoly gas utility, which is unleashing an aggressive push in the NGV market.

The broader controversy is SoCalGas's filing late last year asking for the establishment of a broad-based compression tariff. That has been deemed by a CPUC regulatory judge to be a rate-setting case and thus hearings have been set for June. A final decision is not expected until the end of the year.

In the meantime, the Los Angeles-based utility has stirred the pot with a letter informing the CPUC that SoCalGas has an agreement for providing compression services to the Los Angeles Unified School District (LAUSD). The utility argues that this contract does not have to await the broader rate-setting case because it is with a government agency and is exempt from normal CPUC oversight.

According to CPUC records, Clean Energy Chairman Warren Mitchell, a retired former president of SoCalGas, and other company executives met with CPUC officials in April and May, urging the rejection of the LAUSD proposal and the broad compression services tariff. In meetings with advisors to Timothy Alan Simon -- the assigned commissioner for the compression tariff proceeding -- and Commissioner Catherine Sandoval, Mitchell and other Clean Energy officials expressed "shock" that SoCalGas had "the temerity and audacity" to enter into the LAUSD agreement when it had not received authorization from the CPUC to provide the NGV services, according to CPUC public records.

In April, SoCalGas executives had separate telephone contacts with CPUC President Michael Peevey and Simon and their respective advisers, urging the regulators to approve the LAUSD proposal, according to the CPUC records.

SoCalGas has reiterated that is "had a right to construct and own compression facilities for NGV refueling for 'government agencies' without prior commission authorization" because its only obligation was to notify the CPUC that it had entered into the LAUSD agreement.

In its original application for the compression services tariff, which is now the subject of formal hearings, SoCalGas said it would not conduct activities on a customer's premises "beyond the point of the customer's receipt of compression service, and as a consequence, will neither own, operate or maintain facilities, or conduct business operations beyond the point of [compression] service delivery."

In this way, the utility is trying to say it will not encroach on Clean Energy's business of providing fuel, storage and refueling facilities, but the NGV fueling firm is not buying any of that.

In March Clean Energy filed a motion with the CPUC asking for an investigation and an order to show cause why SoCalGas should not be enjoined from entering into compression services agreements without prior commission authorization. In late March the CPUC's energy division suspended consideration of the advice letter on the grounds it required further staff review.

©Copyright 2012 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.