Frontlines

Fortnightly Magazine - May 1 1998
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CALIFORNIA IS AT IT AGAIN. THE SUBJECT IS NATURAL GAS. What the "blue book" promised for electricity, the newly issued "green book" says it will do for gas.

On Jan. 21, the Division of Strategic Planning at the state public utilities commission issued a new 125-page study, Strategies for Natural Gas Reform: Exploring Options for Converging Energy Markets. On the same day, the PUC opened a new rulemaking (R. 98-01-011), asking for input on the DSP report and posing its own list of some 25 questions on where to go with gas. By late March, nearly 50 companies and groups had filed comments, creating a stack 500 pages tall when downloaded from the Internet. The comments mull over the three basic ideas in the DSP study: (1) take LDCs out of the merchant business, (2) streamline the remaining pipes business with some sort of price cap or performance-based rate making, and (3) create parallel structures (unbundling, pricing, markets) for gas and electricity, since both industries are converging. The PUC promises a draft order by June 1.

The excitement began to fade, however, when the PUC opened its first hearing April 6. Though it attracted at least 30 witnesses (em representing LDCs, marketers, customers, power producers and advocacy groups (em the meeting failed to build much of a buzz. A trusted source who attended the hearings tells me that only two of the PUC's five commissioners, Jessie Knight and Gregory Conlon, asked any significant questions. I hear that President Richard Bilas had little to say, while Henry Duque and Josiah Neeper reportedly kept mum. As my source reports, the overall sentiment was more like, "If it ain't broke, don't fix it."

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