A Gas Race Worth Billions

Readers of your editorial (Nov. 20), “A Race Worth Billions,,” might infer that residential and other natural gas consumers have little stake in the outcome of who provides natural gas service to oil producers in Kern County. That is not the case.

The California Public Utilities Commission should be credited for its innovative proposal for a gas transportation program that would enable the state’s utilities to move large volumes of gas to this market. Such transportation arrangements will make it possible for large customers to secure their own supplies, rather than buy gas from a utility, and have these supplies transported through the utility pipeline systems.

In this way, gas transportation revenues estimated at $100 million a year will provide an economic benefit to gas consumers throughout the state by helping to offset the costs of operating these capital-intensive utility systems.

We believe that the PUC’s decision on gas transportation will enable us to deliver gas at a competitive price, and with sufficient delivery assistances, to make this service attractive to Kern County’s oil producers. These large end-users are not required to buy gas from the California gas distributors.

After listening carefully to all sides in this complex issue, the PUC decided that both potential and existing gas consumers would benefit most through utility gas service to the developing Kern County market, rather than having it served by a new interstate pipeline. We agree. This PUC decision also lays the groundwork for resolving how Southern California Gas Co. and Pacific Gas and Electric Co. can operate to serve the new customers cost-effectively.

In summary, we believe the PUC’s approach to serving this market deserves support. It heralds a new era that should lead to even better utilization of California’s intrastate natural gas transmission systems and benefits for all the state’s gas consumers.

R.M. LOCH

Los Angeles

Loch is senior vice president of the Southern California Gas Co.