Pacific Gas and Electric Co. on Thursday asked California state regulators to extend its so-called “Gas Accord” for one year under 2002 terms, endorsing a settlement the utility reached with major players in the Northern California energy market. The utility told regulators that its “Gas Accord II” has “wide support from all sectors of the natural gas and electric power industries,” including residential ratepayer representatives. It had previously proposed a two-year extension, with deference to the federal bankruptcy court in which it is undergoing Chapter 11 reorganization proceedings.

Gas Accord II is supported by several groups, the CPUC’s Office of Ratepayer Advocates, shippers and large customers. The settling parties have asked the CPUC to approve the settlement on an expedited basis so that gas supply arrangements can be in place in time for the upcoming winter season.

Under the settlement, PG&E’s utility will extend for another year the market structure, rates, terms and conditions for gas transmission and storage service in its northern California territory, extending transmission deals through Dec. 31, 2003 and added a 12-month period to transmission from April 1, 2003 through March 31, 2004.

“The contracts would remain in place for the one-year time period or could be converted to contracts under the jurisdiction of the Federal Energy Regulatory Commission if Pacific Gas and Electric Co.’s bankruptcy plan of reorganization is approved,” PG&E said in a statement.

In addition to extending natural gas suppliers’ firm gas transportation and storage services, the settlement calls for an open season for capacity not subscribed through the extension periods. PG&E’s utility said in its announcement it is hoping to “help stabilize the electric market, since gas is a primary fuel for electricity generation.”

In October 2001, the utility proposed a two-year extension of the Gas Accord to the CPUC in order to keep in place the existing market structure and rates pending resolution of the ongoing bankruptcy case. The Gas Accord II settlement now provides for a one-year extension along the line of the original proposal, and “also establishes procedures for resolving issues related to the second year, as necessary.”

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