Pacific Gas & Electric Co. (PG&E) is moving forward with a proposal to transfer jurisdiction over its mainline natural gas transmission facilities and storage system from the California Public Utilities Commission (CPUC) to the Federal Energy Regulatory Commission (FERC).
The natural gas pipelines at issue cross into the southwestern United States as well as Canada. According to Crossborder Services, an energy consulting firm, the proposed change in jurisdiction would significantly affect Canadian gas exporters and others who ship on Pacific Gas Transmission (PGT), as well as southwestern gas producers and those who ship gas to California on El Paso and Transwestern. It would also impact issues such as rolled-in versus incremental rates for PGT and PG&E, the crossover ban on shipments into California, bypass competition in northern California, and future competition for service to southern California and Mexico. Crossborder further characterized the proposal as a competitive response to Mojave Pipeline's northern extension into PG&E's service territory.
Although PG&E has not yet applied to the FERC or the CPUC, the CPUC has prohibited PG&E from taking any action to accomplish the jurisdictional change until it receives CPUC approval (Resolution No. L-244). Among the likely "significant adverse impacts on California citizens," the CPUC pointed to alteration of the incremental rate structure for the PG&E expansion project and adverse rate impacts on captive customers. The CPUC also expressed concern that PG&E might attempt to compete in the service territories of other CPUC-regulated utilities, and that construction of unneeded facilities might result. (em LB