Pacific Gas and Electric Proposes Increases in Natural Gas Rates
On December 19, Pacific Gas and Electric Company (PG&E) filed its 2015 Gas Transmission and Storage Rate Case with the California Public Utilities Commission (CPUC). PG&E is seeking to collect a total of $1.286 billion for 2015, $1.346 billion for 2016, and $1.515 billion for 2017 from all of its gas customers. Improving system safety is a main focus of the proposal, which includes plans to:
• Replace vintage transmission pipelines that could be at risk from land movements
• Continue testing pipelines to verify safe operating pressures
• Continue controlling corrosion to avoid underground leaks
• Install more automated safety valves to quickly turn off gas in case of emergency
• Inspect the interior of more pipelines to spot hidden flaws
• Strengthen levee and water crossings
• Maintain underground gas storage facilities that help meet peak-hour demand
• Modernize infrastructure control systems, databases, and risk analysis programs
Rate Impacts of Proposed Revenue Changes
If the request is approved by the CPUC, PG&E will update its gas transportation and storage rates effective January 1, 2015. PG&E forecasts that the class-average rates for Industrial and Electric Generation customers receiving service at the distribution or local transmission level will increase approximately $0.050 per therm in 2015, $0.004 in 2016 and $0.014 in 2017. Resulting class-average year-over-year percentage rate changes are shown below:
Proposed Year-Over-Year Gas Transportation Rate Changes
|
Average - 2015 over 2014 |
Average - 2016 over 2015 |
|
Average-2017 over 2016 |
|||
|
Rate Schedule |
$ Per |
% |
$ Per |
% |
$ Per |
% |
|
G-NT |
$0.051 |
27.1% |
$0.004 |
1.8% |
$0.014 |
5.7% |
|
G-NT |
$0.050 |
57.9% |
$0.004 |
3.2% |
$0.014 |
9.8% |
|
G-EG (D/T) |
$0.051 |
102.1% |
$0.004 |
4.4% |
$0.014 |
13.3% |
PG&E has indicated that the revenues collected will not be used to offset any CPUC mandated fines and/or penalties resulting from the pipeline explosion in San Bruno in 2010 that killed eight people and destroyed 58 homes.
The CPUC will conduct a year-long review of PG&E’s request, including public participation hearings, comments from consumer advocates and interested parties, and evidentiary hearings before an Administrative Law Judge. At the end of this process, the CPUC will issue a decision, currently expected by the end of 2014 or early 2015. The proposed rate increases are substantial and CLFP will be actively participating in this proceeding and will be keeping members apprised of developments.
Article written by Rob Neenan, CLFP President and CEO
California League Of Food Producers