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SoCalGas Arques Over Fuel Charge

Fortnightly Magazine - October 1 1996

Southern California Gas Co. (SoCalGas) has taken issue with the coal industry's opinion that lower electric rates from restructuring would increase electricity use, and that strict environmental regulations would require meeting the increased demand with out-of-state generation.

"These coal industry groups suggest that electricity demand will rise because cheap coal-fired electric power (em generated in Arizona and elsewhere (em will now be available," said Lee Stewart, a SoCalGas senior vice president. In comments filed recently at the California Public Utilities Commission, SoCalGas charged that the argument that electricity is more efficient than other types of fuels in end-use applications is "not accurate on a full-cycle basis, when source energy is considered." SoCalGas pointed to Department of Energy estimates that rate natural gas and electric end-use efficiency at 91 and 30 percent, respectively. The benefits of displacing gas with out-of-state electricity would be negligible within the state, yet states with increased coal generation would suffer effects from higher nitrogen oxide emissions, the utility added.

Stewart pointed out that transmission pricing could tip the scales in favor of greater use of out-of-state facilities. Prices that do not reflect the cost of transmitting electricity to the customer could create a strong economic incentive to expand use of coal generation, he argued. SoCalGas strongly opposes transmission pricing based on a single access fee.

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