Pacific Lighting Quits Proposed Alaska Pipeline

Pacific Lighting Corp., pulling out of another investment that looked good during the 1970s energy shortage but has since soured, said Tuesday that it has withdrawn from the proposed Alaskan natural gas pipeline and will ask that its Southern California Gas Co. subsidiary be granted a rate increase over four years to cover the $26 million it spent on the project.

The proposed rate hike would add four cents to the average monthly residential gas bill for four years, Pacific Lighting estimated. The California Public Utilities Commission is expected to decide on the proposal within the next few months.

The increase is the second that Pacific Lighting has sought in six months to cover investments that the company has found unprofitable now that natural gas is no longer in short supply.

The first, which was proposed last fall and took effect Jan. 1, adds 11 cents a month to the average residential bill for the next four years, the company said. It represents $70 million that Pacific Lighting wants to recover from ratepayers on an abandoned liquefied natural gas project.

Consortium Dwindled

Natural gas from Alaska and Indonesia was to be cooled to a liquid and then transported in special tankers to a plant near Santa Barbara, where it would be re-heated and then distributed to consumers.

The proposed $43-million Alaska pipeline was intended to bring natural gas from Alaska’s North Slope to the Lower 48 states. It was sponsored by the Alaskan Northwest Natural Gas Transportation Co., a consortium that was founded in 1978 by 10 energy companies. With Pacific Lighting’s withdrawal, the consortium members have dwindled to five.

Last year, Pacific Lighting wrote off $6.5 million in interest and other costs related to the Alaskan pipeline and another $53.5 million for interest and other costs related to the liquefied natural gas project. In essence, the company’s shareholders pay the cost of such write-offs.