Pacific Gas and Electric Co. files ‘Gas Accord II’ settlement

SAN FRANCISCO, May 28, 2002 — Pacific Gas and Electric Company has filed, on behalf of itself and multiple other parties, a settlement with the California Public Utilities Commission (CPUC) which, if approved, will extend for one year the “Gas Accord,” a comprehensive set of rules for the Pacific Gas and Electric gas transmission and storage system.

The settlement would give gas suppliers and other Pacific Gas and Electric Company customers the opportunity to extend existing contracts for firm gas transportation and storage services, and also would set up an “open season” for capacity not subscribed through contract extensions. It also would fix all rates for gas transmission and storage services at existing 2002 levels.

This “Gas Accord II” Settlement has wide support from all sectors of the natural gas and electric power industries, including representatives of residential ratepayers. The Settlement will help ensure that ample supplies of competitively-priced natural gas are in place for the winter heating season. By providing suppliers the opportunity to continue existing transmission and storage contracts for a one-year period, the Settlement would also help stabilize the electric market, since gas is a primary fuel for electricity generation.

This proposed Gas Accord II settlement establishes the market structure, rates, and terms and conditions of service for gas transmission and storage under the jurisdiction of the California Public Utilities Commission. The settlement allows for the continuation of transmission contracts for a one- year period from January 1, 2003, to December 31, 2003, and storage service from April 1, 2003, to March 31, 2004. The contracts would remain in place for the one-year time period, or could be converted to contracts under the jurisdiction of the Federal Energy Regulatory Commission if Pacific Gas and Electric Company’s Bankruptcy Plan of Reorganization is approved.

In October 2001, Pacific Gas and Electric Company filed an application with the CPUC, proposing a two-year extension of the Gas Accord, in order to keep in place the existing market structure and rates pending resolution of Pacific Gas and Electric Company’s bankruptcy case. The Gas Accord II Settlement now provides for a one-year extension along the line of Pacific Gas and Electric Company’s original proposal, and also establishes procedures for resolving issues related to the second year, as necessary.

The Gas Accord II Settlement is supported by several groups; including the Office of Ratepayer Advocates, shippers and large customers. The settling parties have asked the California Commission to approve the Settlement on an expedited basis, so that gas supply arrangements can be in place in time for the upcoming winter season.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at

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