CPUC Melds SDG&E and SoCal Gas Transmission Rates

Gas transmission rates for SoCal Gas customers will rise as a result of the California Public Utilities Commission's 4-0 vote April 13 to integrate SoCal Gas's and San Diego Gas & Electric's transmission systems. Their facilities will be combined and equalized so that the cost of new liquefied natural gas deliveries will be spread to both sets of ratepayers. SoCal Gas customers' rate hike is estimated at about $14.4 million. That is expected to cover the cost of new pipelines. According to commissioner Geoffrey Brown, "The rate impact on SoCal Gas ratepayers will be outweighed by the access to alternative sources of natural gas." He added that bringing in liquefied natural gas supplies from Mexico will lower the cost of gas supplies to Southern California. "We should do all we can to have reentry LNG to meet California's needs," Brown said. Commissioner John Bohn recused himself because of his investments in Chevron, which was developing an offshore LNG project in Baja California but withdrew its plans. Gas imported to LNG regasification projects in Baja California is expected to flow to Otay Mesa and will likely require a flow reversal in the pipelines. Small volumes of warmed liquefied natural gas sent to Otay Mesa will go to SDG&E ratepayers. Infrastructure improvements are needed to transport it to SoCal Gas customers. The cost will depend on the amount of gas sent into the pipelines. Both groups of customers "will have access to receipt points on both systems, regardless of the other supply source, at a single integrated rate," states Brown's decision. The Division of Ratepayer Advocates supported the rate integration. However, it wanted the higher rates on SoCal Gas ratepayers phased in, which the decision does not do. Brown's decision adds a caveat: if delivering liquefied natural gas supplies through the pipelines doesn't lower costs, the CPUC may reconsider the integrated transmission rate.

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CPUC Melds SDG&E and SoCal Gas Transmission Rates

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