SoCal Gas to Sharply Cut Deliveries to Area Utilities

Southern California Gas, blaming unusually high demand for natural gas by the region’s electricity generators, will sharply cut gas deliveries to Southern California Edison and other electric utilities as of 6 a.m. today to conserve gas for winter.

The curtailment will force the utilities to burn oil to power their generators, roughly doubling the air pollution contributed by electric utilities at the peak of Southern California’s smog season.

SoCal Gas said it would deliver additional natural gas to the utilities in the event of “smog episodes.” But it said it doesn’t know whether it could meet demand on all first-stage smog alerts, when air is designated “unhealthful” to “very unhealthful,” but not yet “hazardous.” It expects the curtailment to last through October.

“We’re deeply disappointed. It means the electric power generators will have to switch to dirtier heating oil, which is much more polluting than natural gas,” said Thomas Eichhorn, a spokesman for the South Coast Air Quality Management District.

It is the second time in eight months that SoCal Gas has had to restrict deliveries to major customers because of dwindling storage levels.

The action affects Edison, the Los Angeles Department of Water and Power, San Diego Gas & Electric, the Imperial Irrigation District and municipal utilities in Pasadena, Burbank, Glendale and Vernon.

SoCal Gas said it will reduce deliveries to electric utilities as much as necessary for it to meet its storage needs. That will probably mean the utilities will get about 800 million cubic feet of natural gas per day, a reduction of about 20% from their normal usage.

But that would be less than half of its peak send-out of 1.8 billion cubic feet to electric utilities on one occasion earlier this summer, and only about half the gas it supplied to the utilities on several days.

Gas company executives blamed most of the stepped-up demand on the drought, which has dried up supplies of hydroelectric power from the Pacific Northwest. Edison and other electric utilities in the West have had to make up that source of power with natural gas.

Cogeneration facilities--those that generate electricity with spillover heat from unrelated manufacturing processes--also used more natural gas than SoCal Gas expected, said Fred John, an executive vice president.

Work on Pipelines

Maintenance work on El Paso Natural Gas pipelines that transmit natural gas into California from the Southwest also coincided with the stepped-up demand, reducing the gas available to serve its customers, the gas company said.

“We had meetings with the electric utilities in late July and told them we couldn’t sustain their very high levels of demand into the foreseeable future, and we asked them to reduce their usage,” gas company spokesman Rich Puz said. “But we didn’t see much in the way of results.”

Puz also said the situation was exacerbated when Edison and the DWP took extra natural gas to generate power to send to Pacific Gas & Electric, which was especially hard-hit by the drought.

However, an Edison executive gave a different account and disputed the suggestion by SoCal Gas that recent down-time at two nuclear plants and Edison’s sale of power to PG&E; had significantly worsened the problem.

Harold Ray, vice president of fuel supply at Edison, said the utility actually used less natural gas in July and so far in August than it had forecast to SoCal Gas. Its natural gas usage so far this year is below last year’s level, Ray added.

“The issue at hand is not how much gas is being burned today or any other day, it’s how much gas they have been able to store,” Ray said.

He was referring to the underground storage reserves maintained by SoCal Gas. The company normally buys more gas than it sells at this time of year, and fills its storage tanks in preparation for winter.

But in July, John said, the utility actually took 7 billion cubic feet out of storage, reducing inventories to 45 billion cubic feet. Another 1 billion cubic feet has been taken from storage to meet demand in August, he said.

To meet its target of 68 billion cubic feet for Nov. 1, SoCal Gas will have to inject 500 million cubic feet of gas into storage each day, according to John. That would also leave 10 billion cubic feet “banked” for emergency use on smoggy days.

Cold-Weather Demand

In January, SoCal Gas completely cut off delivery of natural gas to nearly 900 large customers, including electric utilities and big industrial customers. The utility acted after unusually high demand caused largely by cold weather here and elsewhere in the country.

The gas company admitted then that, for some of the same reasons cited now, it had failed to meet its underground storage targets for Nov. 1. That forced the curtailment to assure that residential customers, who don’t have the capacity to switch fuels, would have enough natural gas to last the winter.

One reason cited by SoCal Gas executives that it didn’t meet the November, 1987, target was a reluctance to conserve gas by curtailing electric utilities during summer because of the smog. Instead, the utility gambled that a turn in the weather would ease demand.

Edison officials said they will have to burn up to 55,000 barrels of oil per day in place of the natural gas it won’t be able to buy. That would add 20 tons of nitrogen oxide to the air daily, on top of the 17 tons emitted normally by Edison’s gas-burning plants. The fuels are used to power the boilers that generate electricity.

Eichhorn said heating oil is considered twice as dirty as natural gas in terms of emitting nitrogen oxide, one of the two ingredients that lead to the formation of ozone in the presence of sunlight. The other ingredient is hydrocarbons. Ozone makes up about 95% of what is commonly known as photochemical smog.

Electric utilities contribute about 45 of the 254 tons of nitrogen oxide entering the air in the Los Angeles Basin each day, Eichhorn said.

The action by SoCal Gas comes amid what Eichhorn described as an “unusually good August” in terms of air quality, due to meteorological reasons.

He said the curtailment bolsters the air quality district’s case for additional measures to reduce nitrogen oxide emissions from electric generating plants.

“Ironically, one argument the utilities use against the need for additional controls is that curtailments of natural gas occur in the winter, when smog isn’t so much of a problem,” he said. “This one is coming in the summer.”