Calif. to use customer bills to secure PG&E gasgreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
Calif. to use customer bills to secure PG&E gas Updated 8:29 PM ET January 31, 2001
SAN FRANCISCO (Reuters) - The California Public Utilities Commission (CPUC) voted Wednesday to allow Pacific Gas and Electric Co. to pledge its customers' monthly gas bills as collateral to assure natural gas marketers they will get paid for continuing to supply the financially strapped utility. The CPUC said it acted to protect the health and safety of the utility's 3.8 million gas customers in northern and central California and to avoid a worsening of the state's energy crisis.
Gas suppliers had threatened to shut off gas shipments to the utility unit of PG&E Corp. without some assurance they would get paid.
The company, which is on the edge of bankruptcy, has no credit and claimed it was down to about 10 days' worth of gas supplies in its storage fields.
PG&E is one of the nation's largest gas buyers, importing supplies from as far afield as the Southwest and western Canada to supplement in-state production.
In January, PG&E needed 3 billion cubic feet of gas a day for its customers, split evenly between "core" consumers--homes and small businesses--and large "non-core" industrial users.
About one-third of the gas fuels power plants in the state.
The CPUC's action came about one hour after the California Senate approved emergency legislation that allows the state to buy power and supply it directly to consumers hit by the power crisis.
California is in the midst of an energy crisis marked by soaring prices for wholesale electricity and gas, strong demand for power to support a growing economy and population, and tight supplies of electricity caused by a lack of generating capacity.
Loretta Lynch, president of the CPUC, supported the action on payments and blasted gas suppliers "for taking advantage" of California's energy emergency "to extract another pound of flesh" from PG&E and its customers.
She said PG&E was the "victim of predatory practices" by the gas marketers.
Commissioner Carl Wood, who joined with consumer groups to support the action, said he was "concerned that PG&E's customers may be in serious danger of losing their gas supplies to heat homes and businesses after February 6."
That is the date a federal order requiring gas and power companies to continue to supply California expires. The Bush administration has said it will not extend the order.
Wood said the CPUC's decision may be canceled 90 days from adoption or 15 days after PG&E's credit rating is raised to investment grade from its current junk status.
-- Martin Thompson (firstname.lastname@example.org), January 31, 2001