The California Public Utilities Commission (CPUC) has directed Southern California Gas Co. (SoCalGas) to set up a special account to track savings from reduced reservation charges for interstate gas pipeline capacity. The cost savings will track efforts by SoCalGas to reduce capacity reservations on the El Paso and Transwestern pipeline systems.
The CPUC also set up a process to review allocation of savings between core and noncore customers. SoCalGas had proposed to allocate the savings to the noncore sector, noting that smaller capacity reservations would not change basic service requirements for core customers. The CPUC noted that the contract costs for firm transportation on both pipeline systems were substantially higher than market prices, and that SoCalGas enjoyed options during 1996 to reduce its service commitments. The "step downs" could reduce the utility's cost of interstate transportation by many millions of dollars, it added. Re Rulemaking to Change Structure of Gas Procurement Practices and to Propose Refinements to the Regulatory Framework for Gas Utils., R.90-02-008, R.88-08-018, Decision 95-12-037, Dec. 18, 1995 (Cal.P.U.C.).
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