Season Deemed a Success

Pacific Gas and Electric Co. reported a successful conclusion toits two-month Gas Accord open season, in which more than 65companies submitted winning bids on the utility’s in-statetransmission capacity and related services. Firm capacity in thebidding was fully subscribed on only one of PGandE’s four majorintrastate “pathways,” however.

As expected by most industry observers, the 731 MDth/d ofcapacity in 1998 (starting March 1) and 973 MDth/d in 2000 on theso-called Redwood Pathway, which is to PGandE’s citygate, storageor other spot locations in Southern California from the Malin, ORborder point, was fully subscribed. That “is not a surprise,” saidone PGandE spokesperson, adding access to Canadian supply stillattracts the strongest demand. PGandE’s own utility electricgeneration group alone was expected to bid on all of the availablecapacity at maximum rates. PGandE will not, however, be releasinginformation on the winning bidders or on how much capacity on theother transportation paths was subscribed, the spokesperson said.

The capacity available on the other two pathways during the openseason included 141 MDth/d in 1998 and 2000 on Silverado, which isfor California production to any spot or citygate location; and 296MDth/d in 1998 and 2000 on Baja, which is for transporting gas fromTopock, AZ, Daggett, or KernRiver Station to any spot or ciygatelocation.

The lack of interest in the other transportation paths is a”clear signal of a vibrant secondary market developing,” accordingto the PGandE spokesperson. “Overall, we were very pleased with theresults of the open season.”

The Feb. 4 conclusion of the bidding paves the way forimplementation of the Gas Accord, or unbundling of rates andservices, starting March 1. Rates for the deals remain effectivethrough Dec. 31, 2002, which is the same time at which California’selectricity market will be fully opened. Rocco Canonica, Washington;

Richard Nemec, Los Angeles

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