PG&E seeks federal natural gas order through February : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

PG&E seeks federal natural gas order through February

January 19, 2001 9:39pm Source: Reuters

SAN FRANCISCO (Reuters) - Cash-strapped utility Pacific Gas & Electric (PG&E) said late Friday it will seek an extension of a four-day federal order requiring out-of-state natural gas suppliers to sell to it through February, saying the order would not relieve a gas shortage in the coming days.

``Without that extension we are concerned that millions of Californians could be in jeopardy of gas shortages in early-to- mid-February...,'' a written statement from the company, a unit of San Francisco-based PG&E Corp. , said.

The utility, after warning it will miss payments this month to some of its creditors, saidThursday that six of its suppliers -- accounting for 36 percent of its daily supplies -- have either cut deliveries or may stop service by January 23, the day the federal order expires, due to its perilous financial standing.

PG&E, which has secured just a little over half of the gas it needs next month to serve its 3.8 million gas customers, also warned another 30 percent of its daily supplies for January could be cut by other suppliers who fear not being paid.

The utility, which serves customers in northern and central California, has piled up more than $6 billion in wholesale power costs it cannot pass on to its customers due to a rate price cap imposed by the state's deregulation law.

Friday, U.S. Energy Secretary Bill Richardson signed an emergency order requiring out-of-state companies to continue selling surplus natural gas to PG&E.

The order applies to natural gas suppliers that provided gas to PG&E during the preceding 30 days under the terms of any contact arrangement in existence during that period. If a supplier and PG&E fail to agree on contract terms, the energy secretary would set the terms.

``We hope that the order will be extended at least through February so that it can be used to get enough baseload gas lined up to meet our expected February gas needs,'' PG&E said.

If PG&E is unable to secure the gas its needs, it could be forced to cut service to ``non-core'' industrial users.

PG&E has said the needs of core customers, like residential and small business customers, will be met and would only be reduced if service to all non-core customers had been cut and gas in the utility's storage facilities were completely exhausted.


-- Martin Thompson (, January 22, 2001


This should be interesting considering the Bush adminisration position on California.

-- Martin Thompson (, January 22, 2001.


WASHINGTON, Jan 23 (Reuters) - U.S. Energy Secretary Spencer Abraham extended, through Feb. 6, two emergency orders requiring energy firms to sell surplus electricity and natural gas to California's utilities to help prevent more blackouts in the state, an Energy Department spokesperson told Reuters.

The emergency orders had been set to expire in a matter of hours -- midnight California time. Without an extension, the state could have lost much-needed electricity and natural gas supplies.

More than a million residents and businesses in the nation's richest state have already suffered rolling blackouts caused by tight supplies and soaring prices.

California's two biggest utilities -- Edison International unit Southern California Edison and Pacific Gas and Electric - - have been brought to the brink of bankruptcy by the power crisis. Some out-of-state firms have been reluctant to sell them electricity and natural gas because of fears they would not be able to pay for the supplies.

The emergency orders, initially issued by the Clinton administration, have forced the out-of-state firms to keep doing business with the two California utilities.

-- Martin Thompson (, January 23, 2001.

I guess someone had second thoughts about California.

-- Martin Thompson (, January 23, 2001.

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