Ever-timid in their reactions to the increasing number ofemergency requests from utilities of late,ÿCaliforniaÿregulatorsmodestly extended a new securitization contract approach tomaintaining Pacific Gas & Electric’s future fuel supplies. TheCPUC action allows PG&E to continue offering suppliers theoption of a lien in retail customer bills that covers the full costof wholesale gas prices. Its 30 to 40 suppliers can sign on for upto 180 days (from the previous 90-day limit). PG&E hadrequested the securitization deals be extended up to 365 days.

In a separate but related matter, the California PublicUtilities Commissionÿwill hold hearings today on PG&E’semergency request that regulators force neighboring SouthernCalifornia Gas Co. to provide supplies to some of the northernCalifornia utility’s core customers.

PG&E currently has 11 suppliers, representing about 40% ofits supply requirements signed on to at least the 90-day version ofthe new securitized contracts. It has enough supplies to lastthrough this month with storage down to 6 Bcf of gas. Only two ofits suppliers, representing about 10% of its load, are stillwithholding supplies.

PG&E’s gas utility has tried to leverage the newly acquiredcontracting authority from state regulators to amend its short-termgas supply deals and keep supplies flowing to the state in theabsence of a federal DOE emergency order. More than two-dozen ofthe utility’s natural gas suppliers have been reluctant to extendcurrent contracts because of the financial uncertainty hoveringover PG&E amid the state electricity crisis.

On the power side, Gov. Gray Davis says he will unveil thedetails of what he is calling a “consensus agreement” for a”balanced recovery plan” for the state’s two largest investor-ownedutilities today. The bailout settlement is expected to focus on thestate buying the utilities’ transmission assets and then leasingthem back to them to operate and maintain under the stateindependent system operator (Cal-ISO). Legislation in the statesenate is already under way to make this happen.

A federal court judge is also expected to consider today whetherto extend the order, which expires today, requiring Reliant Energy,Dynegy, and AES Corp. to continue selling power to the Cal-ISO.

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