Senior management officials of Pacific Gas and Electric (PG&E) “have approved in principle” a sales agreement and auction protocol to pave the way for the sale of the company’s 500- to 600-mile natural gas gathering network in northern California to individual producers on its system.
PG&E and the producers “wanted to agree on a process so everyone [producers] had a fair shot” at bidding on parts of the system, said Rock Zierman, executive director of the California Natural Gas Producers Association, a subsidiary of the California Independent Producers Association.
The sale of the PG&E gathering system could come as early as next year, he noted. First, PG&E has to divide up its system into sections, and the California Public Utilities Commission (CPUC) must give the green light to the sale, Zierman said. The latter is expected to be a no-brainer, since it was the CPUC that suggested PG&E exit the gathering business in the early 1990s.
Any producer on the PG&E gathering system can bid on the facilities, Zierman said. He estimated that at least a dozen producers are interested in picking up the utility’s gathering lines.
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