Cost

Sponsors of Canada’s arctic natural gas project have beaten off a challenge from within the industry by winning a cost-saving decision from the National Energy Board. The NEB, in a ruling on a hotly-contested move by newcomers to the northern Canadian gas scene, refused to declare the Mackenzie Gas Project’s 190-kilometre (120-mile) Mackenzie Delta gathering grid a common carrier subject to open-access and tariff regulation.

Sempra Energy’s Southern California Gas Co. utility, operator of several major underground natural gas storage fields, now has a cost- and revenue-sharing process in place so it can explore for and produce supplies located adjacent to its storage fields in Southern California, following unanimous action Thursday by the California Public Utilities Commission. SoCalGas reached a settlement last July with a number of major stakeholders, including consumer groups, large customers and large producers, that was the basis for the regulatory action.

Sempra Energy’s Southern California Gas Co. utility, operator of several major underground natural gas storage fields, now has a cost- and revenue-sharing process in place so it can explore for and produce supplies located adjacent to its storage fields in Southern California, following unanimous action last Thursday by the California Public Utilities Commission. SoCalGas reached a settlement last July with a number of major stakeholders, including consumer groups, large customers and large producers, that was the basis for the regulatory action.

The American Gas Association (AGA) on Wednesday gave high marks to the Senate for approving an additional $1 billion for the Low-Income Home Energy Assistance Program (LIHEAP) for fiscal year 2006, bringing total funding for the year to nearly $3.2 billion.

Many of the predictions, cost estimates and energy price forecasts in the National Petroleum Council’s (NPC) $30 million study in 2003 on Balancing Natural Gas Policy came up well short of what actually transpired over the last two years, but its policy recommendations remain right on the money, according to many presenters at the Department of Energy’s (DOE) roundtable on Balancing Natural Gas Supply and Demand Tuesday in Washington, DC.

Gulfstream Natural Gas System has disclosed it is working on two new expansion projects to take capacity of its line from 1.1 million Dth/d to at least 1.25 million Dth/d. The projects would cost about $135 million and $100 million. Beyond a short financial disclosure notice on its electronic bulletin board (EBB), however, the company is not yet discussing details of the projects.

Sending a message it wants both aggressiveness and cost-effectiveness in a billion-dollar utility meter-change-out proposal, the California Public Utilities Commission Thursday granted Pacific Gas and Electric Co. $49 million in pre-start-up funds — despite a staff recommendation to slash the amount to $7 million — for its proposed five-year effort to transform all of its natural gas and electricity utility customers to advanced (“smart”) metering systems.

The Nevada Public Utilities Commission will hold consumer hearings Tuesday and Wednesday on the gas cost recovery case of Southwest Gas Corp., which has asked to raise its rates overall by $41.6 million to cover deferred costs of wholesale fuel supplies as of last March 31. The Las Vegas-based gas-only utility proposed to begin collecting the higher rates Nov. 1.

The California Public Utilities Commission Thursday unanimously approved — although not without reservations — a final cost allocation for Pacific Gas and Electric Co.’s natural gas service charges that will be used in establishing future gas throughput forecasts. The bottom line impact is a 1.2%/therm residential rate increase and decreases for small business (1%) and for large industrial customers, both core (5%) and transportation (22.7%), according to the lead CPUC commissioner on the case, Geoffrey Brown.