PUC Settlement Will Put Gas Rates in Slow Decline : Energy: Southern California Gas Co. customers can expect lower bills after Aug. 1.

The California Public Utilities Commission on Wednesday approved a settlement that will give Southern California Gas Co. customers a small but long-term rate reduction, beginning next month.

What has become known as the Global Settlement resolves a host of long-running gas pricing disputes between the utility, its suppliers and consumer advocates.

The relief for customers--from residents to big industrial users--will be lower rates over the next 19 years, beginning with a modest drop Aug. 1.

Savings could total more than $1 billion during that period for nearly 5 million gas company customers. The typical household’s bill of $19.81 for a summer month will drop by 32 cents. The average winter bill of $44.33 will fall 81 cents, according to gas company estimates.

Large industrial customers--most of whom now buy their gas directly from producers--will receive roughly comparable reductions in the transmission fees they pay the gas company to deliver the fuel.

“Few, if any, filings with the PUC have ever involved so many diverse interests coming together to achieve consensus,” company President Warren I. Mitchell said. “This is a remarkable achievement.”

Parties to the settlement include consumer advocates representing residential and small-business users, the California Manufacturers Assn., Southern California Edison Co. and the Southern California Utility Power Pool--a group of smaller electric utilities that use gas to power electricity-producing turbines.

“We’re satisfied with it,” said Audrie Krause, executive director of Toward Utility Rate Normalization, a consumer group based in San Francisco that was active in the negotiations.

Part of the pact resolves a PUC objection to what the gas company paid for natural gas from 1989 through 1992. The PUC had asked for a $100-million rebate to customers; the utility agreed to pay $65 million.

The other big issue was the utility’s renegotiation of gas-purchase contracts dating back to the 1970s, when energy costs were high and expected to go higher. In fact, gas prices have dropped in recent years, and gas utilities nationwide have sought to get out of long-term contracts under which they must buy gas at rates well above current market prices.

Wednesday’s settlement allows the utility to pay $500 million in up-front costs to renegotiate old contracts with suppliers in California and Canada and replace them with deals tied to fluctuations in gas prices.

Of that $500 million, shareholders of Pacific Enterprises, the gas company’s parent, will absorb $90 million. Ratepayers will shoulder the remaining $410 million--all to be paid in the first five years. The net benefit to customers from this part of the settlement will be $700 million in savings, the utility estimated.