Cheniere Energy Partners LP unit Sabine Pass Liquefaction LLC and Bechtel Oil, Gas and Chemicals Inc. have entered into a lump sum turnkey contract for the engineering, procurement and construction of the third and fourth liquefaction trains to be constructed adjacent to the Sabine Pass LNG terminal in Cameron Parish, LA. The contract price is about $3.8 billion. Total expected costs for the third and fourth trains before financing are estimated to be between $4.5 billion and $5 billion.Sabine Liquefaction intends to give Bechtel a notice to proceed upon achieving financing and a final investment decision. Construction for the third and fourth trains is expected to begin in the first half of 2013. Sabine Liquefaction commenced full construction for the first two liquefaction trains in August. Sabine Liquefaction recently announced that it is developing a fifth and sixth liquefaction train at the project and has entered into a sale and purchase agreement with Total Gas & Power North America Inc. (see Daily GPI, Dec. 18).

California’s four major investor-owned energy utilities had their authorized profit margins decreased collectively by a little more than $500 million, resulting in small annual rate decreases for retail natural gas and electricity customers. Pacific Gas and Electric Co. (PG&E) and Southern California Edison Co. (SCE) took the biggest hits. PG&E’s return on equity (ROE) was dropped from 11.35% to 10.4%, a $237 million drop in its annual revenues, and SCE went from 11.5% to 10.45%, a $217 million decrease in annual revenues. Sempra Energy‘s two utilities, San Diego Gas and Electric Co. (SDG&E) and Southern California Gas Co. (SoCalGas), had similar profit reductions but with less revenue impact. SDG&E’s ROE was cut from 11.10% to 10.3%, a $34 million decrease in annual revenues, and SoCalGas went down from 10.82% to 10.10%, a $22 million reduction. The California Public Utilities Commission unanimously approved the decreases.

The California Public Utilities Commission (CPUC) modified incentives for its energy efficiency program. The CPUC also doled out shareholder awards for 2010 efficiency results for the state’s four utilities. The CPUC has established that annual awards will be earned in the form of a 5% management fee on the efficiency expenditures by each utility. Bonuses can be added at 1% of the annual efficiency costs. Awards for 2010 totaling $42 million were made now; the ones for 2011 results will be granted next year and the ones for 2012 efficiency programs will be given in 2014, the CPUC said. For 2010, the awards were $21 million for Pacific Gas and Electric Co.; $15 million for Southern California Edison Co.; $3.3 million for San Diego Gas and Electric Co.; and $2.7 million for Southern California Gas Co.

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