SoCal Gas Adopts Monthly Pricing

Fortnightly Magazine - February 1 1997
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Southern California Gas Co. (SCG) has begun using monthly forecasts to set prices for its core commercial and industrial natural gas customers, ending the practice of forecasting gas costs more than one year in advance and then computing the bill using a projected, annual weighted-average cost of gas (WACOG).

Monthly gas pricing is expected for residential customers when the California PUC reaches a decision in SCG's Biennial Cost Allocation Proceeding.

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SCG noted that the switchover from an annual to monthly WACOG initially will raise gas bills because gas prices have risen sharply in recent weeks. But SCG added that the monthly WACOG should provide a buffer against peak winter prices by combining the cost of more-expensive flowing gas supplies with less-expensive withdrawals from its local storage fields.

"This puts SCG on a more even footing with gas marketers and aggregators who can adjust their prices monthly," said Herb Emmrich, SCG Director of Sales and Supply Forecasting.


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