SoCal Signals Transportation Changes
The nation's largest gas distributor, Southern California Gas,
last week signaled a possible future change in the way its
customers access intrastate transmission during oral arguments at
the CPUC on future changes in California's gas industry. In
addition, for the first time, a number of the 19 major participants
in the state's gas restructuring proceeding suggested a settlement
process might be adopted to resolve some controversial issues.
The three current holdover members of the five-member California
Public Utilities Commission, now must decide whether to begin
preparing recommendations to the state legislature, which could
consider drafting a law for the final gas industry changes similar
to what it did in 1996 to restructure the electric industry. CPUC
President Richard Bilas told NGI he personally does not think a new
state law is needed to make the remaining changes to the state's
gas industry. Labor unions, however, already have proposed state
legislation this year to prevent wider gas unbundling.
A major change that could occur without legislation was
presented by SoCalGas. It indicated it would be willing to consider
firm capacity rates at receipt points along its several thousand
miles of intrastate transmission pipelines. The change would be
similar to what Pacific Gas and Electric Co. offers on its
intrastate transmission system in central and northern California.
Currently SoCal's transportation system uses "windows" and doesn't
allow customers to hold capacity rights, as PG&E does on its
Under its Gas Accord, PG&E has "tradable rights" like the
interstate pipelines in which you essentially buy a piece of the
space for transporting gas in the pipeline. "SoCalGas doesn't have
that system," noted a CPUC staff member assigned to the gas
restructuring proceedings. "A customer pays them to move gas and
nominate into [SoCal's] system and the utility tells the customer
if it has space to move it or not. A customer doesn't have any
'rights' on the SoCal transmission system." The change suggested by
SoCalGas in the recent CPUC proceeding is a "fairly major step,"
according to the CPUC staff member, who also characterized as new
the notion of pursuing a settlement among the parties as proposed
by Enron and supported by a number of other participants in the
The major interest stakeholders in the state's gas industry have
had their say in the regulatory arena, and now it is up to the
regulators to decide how the process unfolds from here, said the
CPUC staff member close the proceedings. The ball definitely has
now been tossed to the CPUC's court.
Richard Nemec, Los Angeles
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