While more tightly integrating natural gas pipeline operations for its two California-based utilities, San Diego-based Sempra Energy is prepared to spend at least $200 million upgrading its transmission backbone with a new “vision” of having up to 2 Bcf/d of capacity in the southern half of the state to open up to new supply sources. The utilities are hoping for multi-million-dollar, if not “billion-dollar” savings for customers.

In the short term, however, it may mean customers will be paying as much as a half-cent/therm more for transmission, Sempra officials said. They plan for the utilities building new transmission pipelines and related facilities to handle ever-greater volumes of gas, and for the two utilities that equates to an investment of up to $200 million in pipeline and storage upgrades.

A now outdated Southern California Gas Co. settlement for opening up the gas pipeline and storage system in the south is scheduled to be heard by the California Public Utilities Commission April 1, but there is a new proposal to table the settlement in lieu of a major statewide gas initiative the CPUC launched earlier this year. Meanwhile, Sempra’s utilities told their employees in an internal report earlier in March that they have a new “gas vision” to improve future customer access to the SoCalGas-San Diego Gas and Electric Co. transmission pipeline network.

Assuming that access to new supply sources, including liquefied natural gas (LNG), will lower overall costs and increase reliability through more gas-on-gas competition, Sempra utilities’ CEO Ed Guiles told employees that customers “stand to save at least several hundred million dollars and possibly as much as one billion dollars, per year through reductions in the commodity costs than they would otherwise face.”

In its internal report to employees, Sempra’s two utilities listed four results they are seeking this year:

Even with the added capital costs, Guiles said that in the long run “customers will see lower gas bills due to more competition created through increased diversity in supply sources.”

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