California regulators yesterday approved a settlement dealingwith Pacific Gas and Electric Co.’s imbalance procedures andoperational flow orders (OFO). Regulators, however, did not act onthe much tougher issues included in the proposed interim andcomprehensive settlements filed earlier this year by SouthernCalifornia Gas (SoCalGas).

No specific dollar-value was placed on the OFO settlement, butthe various stakeholders all realize cost-savings, according toCPUC Commissioner Richard Bilas, the assigned commissioner in thegas restructuring proceedings. Among the stakeholders agreeing toPG&E’s gas utility settlement are marketers, shippers,suppliers, wholesale and retail customers, storage operators andutility unions.

Bilas noted that the PG&E settlement is “broad-based” andwill help the state regulators avoid a lot of time and moneyholding administrative hearings on the issues, such as thecomplicated way imbalances on the pipeline system are handled withOFOs. According to the settlement, OFO noncompliance charges arelowered from 10 cents/therm to 2.5 cents/therm, and shippers withmonthly charges of less than $1,000 are exempted from thenoncompliance charges. The agreement aims at lessening the numberof systemwide OFOs that are inconvenient and costly to all of thecustomers on the system.

“This settlement advances the CPUC’s stated goals and providesbenefits for each class of customers and for the utilities,” saidBilas, noting that the deal is “reasonable in light of the recordand consistent with applicable state laws.”

“I wish this [same broad-based settlement] would occur inSouthern California,” Bilas added. California’s long-delayednatural gas industry restructuring effort has lasting more than twoyears. Last July, the California Public Utilities Commissionordered PG&E and Southern California Gas to seek negotiateddeals on major issues affecting the further unbundling of theirextensive transmission and storage operations.

Many of the tougher issues for the PG&E system had beenaddressed in its earlier adopted Gas Accord, but SoCalGas beganmore from scratch, and hence, it has had less success in gaining anuncontested settlement.

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