In an offshoot of the court-approved class action litigation settlement over Sempra Energy’s utilities’ alleged driving up of wholesale natural gas prices in the midst of the 2000-2001 energy crisis, the utilities and neighboring Southern California Edison Co. have reached a settlement that calls for changes in the way the Sempra gas storage program is operated. The three utilities jointly filed a motion with the California Public Utilities Commission last Monday to stay a regulatory case examining storage operations.

Pending approval from the CPUC, Edison withdrew its opposition to the court settlement and its complaints in the pending state regulatory case examining the Sempra utilities’ past behavior in California’s natural gas market. The agreement states that the three utilities will “cooperatively seek regulatory approvals” for various operations and rate changes by Sempra’s two units.

Southern California Gas Co. and San Diego Gas and Electric Co. received a stay of two other CPUC proceedings since the June 7 decision by a state Superior Court judge in San Diego to finalize the court settlement in a case that was two months into a jury trial before being struck in early January this year. As a result of the new agreement, SoCalGas would make various changes in its storage and backbone gas transmission pipeline operations to make them more transparent for large shippers, such as the Edison International electric utility.

The settlement seeks to have the CPUC drop its ongoing statewide investigation of California-Arizona border natural gas prices, and even if the larger settlement is rejected by the state regulators, the three utilities have agreed to meet to settle separately the border price case.

Under the settlement, both Sempra utilities would employ an electronic bulletin board to give day-ahead receipts and scheduled maximum capacity available at each receipt point on their mainline transmission pipeline systems, and the utilities would publish annually the capacity and projected average daily use of their combined backbone pipeline system for an upcoming year. There are other operating and rate changes that eventually will develop.

SoCalGas will develop a plan for storage development, including a provision for outlining how incremental capacity would be made available to all SoCal customers on an open-access basis. Generally, the daily operations of the storage and transmission systems would be available via the electronic bulletin board.

As with other settlements, including the court-approved Continental Forge class action case deal, Sempra’s utilities cannot use the deal with Edison as a means of limiting future payments it could be ordered to make in other pending federal and state regulatory or legal actions stemming from the 2000-2001 crisis. There are still disputed aspects of the Sempra utilities’ sales of energy to the California Independent System Operator that are part of pending proceedings at the Federal Energy Regulatory Commission.

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