As tempers continue to get shorter in the midst of California’senergy predicament, the state’s two major investor-owned utilitiesbutted heads this week on a natural gas issue created as anoffshoot of the persistent electricity woes in the state. Itinvolves Pacific Gas and Electric Co.’s emergency filing to stateregulators Jan. 18 asking for Southern California Gas Co. to giveit some supplies in the face of its looming shortages, promptingSoCalGas to protest the request.

Sempra Energy’s SoCal utility, in essence, said no emergency inthe traditional definition has been proven by PG&E to exist andit does not want its financial problems to be transferred to itscustomers.

“The filing is just one of several things that we are doing totry to solve the gas supply shortage,” said Staci Homrig, a SanFrancisco-based PG&E utility spokesperson on Wednesday. “Unlikethe electric situation, we think the gas problem is solvable. Wejust need suppliers to deliver the gas, and we’ll eventually paythem.”

In the meantime, an extension of a DOE emergency order Tuesdayprompted J. Aron to resume deliveries of 135 MMcf/d to the cash-and supply-constrained northern California utility.

Nevertheless, the natural gas side of Pacific Gas and ElectricCo., whose creditworthiness has been eroded by the electricitycrisis, faces the prospects of eventually being cut off in Februaryby a number of suppliers who have refused to extend existingcontracts on credit, insisting they need more assurance they willget paid. As a result, the PG&E utility told the CaliforniaPublic Utilities Commission a “gas supply emergency” exists andSoCalGas should help out.

“Based on projected demands of its core customers, a drop intemperature from the average system composite temperature of aslittle as six-degrees Fahrenheit over the next few days could causePG&E to have a shortfall in supply and force gas outages forcustomers, even if no additional supplies are lost,” PG&E saidin its CPUC filing. “Similarly, if additional suppliers terminateservice, PG&E’s customers could lose service in the next fewdays even during a period of normal temperatures.”

Citing an emergency that could adversely impact both gas andelectric customers, PG&E’s utility asked the state regulatorsto “exercise its emergency authority” to direct SoCalGas to”purchase gas or supply available gas as needed to meet the load ofPG&E’s core procurement customers.”

The commission will consider the request as part of a specialcontinuation meeting it has scheduled for Jan. 26.

Meanwhile, SoCalGas’s protest to the CPUC cited four reasons whythe regulators should reject the PG&E request: (1) the northernCalifornia utility has not “exhausted all of its other remedies,”(2) the shortage is financial, not in supply, (3) SoCal couldjeopardize its own cash flow by being forced to sell to PG&E oncredit, and (4) under the circumstances, if the regulators forcedthe sale it would be “unconstitutional” under the theory that itwould be illegally “confiscating” SoCal assets.

PG&E’s Homrig said her utility continues to explore otheroptions, including negotiating new contract extensions with itsprincipal out-of-state suppliers, using extensions of federal DOEemergency orders and seeking help from California’s politicalleaders now looking at various legislative remedies to theelectricity crisis.

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