Sure to be a welcome boost to its third quarter results, Sempra Energy’s Southern California Gas Co. gained a $48.2 million reward from the California Public Utilities Commission Thursday for the success of it multi-billion-dollar annual gas-buying program over a two-year period, 2000-2002.

The five-member CPUC okayed the reward to Sempra shareholders on a 4-1 vote with Commissioner Loretta Lynch voting against the reward. Lynch thinks some of the money could eventually be returned based on the outcome of SoCalGas’ actions two years ago as part of ongoing state and federal investigations regarding El Paso Natural Gas Co. alleged manipulation of the wholesale gas market in the Southwest.

In the height of the state’s 2000-2001 energy crisis, the CPUC found that SoCal’s overall gas purchasing resulted in costs $223.6 million under a predetermined “gas-cost incentive mechanism” (GCIM) benchmark. The actual cost of all of the utility’s gas purchases during that period was $2.18 billion. SoCal had asked for a reward of $106.1 million, based on a 50-50 split between shareholders and customers, but that figure was reduced by a pending settlement.

Under SoCalGas’s incentive-based gas-buying program tied to pre-agreed-to criteria using performance and price indices, the utility is eligible for rewards based on savings that can be tied to its wholesale gas supply purchasing program after initial savings are distributed to utility retail ratepayers. For 2001-2002, the CPUC authorized a $17.4 million reward, and for the state energy crisis period of 2000-2001, the regulators gave the utility $30.2 million.

In both cases, the majority of the CPUC commissioners agreed with its administrative law judge in the cases who found that the gas utility had “reasonably managed its gas acquisition and operations,” but it added the caveat that the decision does not preclude the commission from later having some or all of the rewards refunded or adjusted in response to the outcome of the pending investigations.

Commissioner Lynch noted that for the comparable period of 2000-01, the state’s other two major investor-owned gas utilities received rewards that were only one-quarter of the SoCal’s reward (Pacific Gas and Electric Co., $7.7 million; and SoCal’s sister Sempra utility, San Diego Gas and Electric Co., $6.8 million).

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