Although a lot has been made of California’s gas pipeline and supply constraints, Southern California Gas Co.’s anti-bypass tariff, which has been discouraging the development of new pipelines — particularly Questar’s Southern Trails project — still has not received much political scrutiny.
The governor and California congressional members last week zeroed in on some of the natural gas supply and price issues affecting the state’s electricity woes, but none specifically noted the tariff issue. California Public Utilities Commission Administrative Law Judge Carol Brown, is reviewing the case, but said last Friday there still was no draft decision on the matter and “she doesn’t know when it will be” addressed, according to a CPUC spokesperson. “Electricity is still a priority” at the regulatory commission, according to the ALJ.
Other stakeholders, such as Salt Lake City-based Questar Pipeline, are unaware of any proposed timetable by the California regulators. Questar and others have made counter-proposals to one submitted by SoCalGas. All are being reviewed by ALJ Brown.
At issue is a 1995 so-called “residual load service” (RLS) tariff that charges electric generators and other large gas users who obtain their primary supplies from a competing pipeline, but want to maintain peaking natural gas service from SoCal for peak-demand periods. The RLS tariff, which is in place now, applies to customers whether or not they take supplies from SoCal.
The CPUC two years ago decided that the RLS needed to be replaced as an offshoot of the natural gas unbundling proceedings of 1998-99, noting that the tariff’s originally intended benefits over time will be outweighed by its detriments.
Questar argues that it cannot sign up several major California customers for its proposed converted oil-to-gas pipeline into Long Beach, CA, including one of the state’s largest cogenerators, because of the tariff, which, in fact, has no customers because to take it makes partial bypass uneconomic. The tariff has been under fire in recent years as being anti-competitive.
SoCalGas has proposed a modified tariff, but it would still apply year-round. Questar has proposed that the tariff only apply to the months in which the peaking service is used. The utility argues that it doesn’t maintain capacity for “occasional use,” so customers who want peaking capacity must pay for its availability year-round.
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