SoCal Gas «confident» on fueling Calif power plants

Sempra Energy told California energy officials on Tuesday its natural gas utility unit was ``confident in its ability'' to fully supply gas-fired power plants in the state this summer and avoid forced cuts in generating capacity due to a lack of fuel.

Saying it had not cut gas service to any customers in more than 10 years, Sempra's Southern California Gas Co. (SCG) said it was ``confident in its ability to meet electric generator demand this summer'' and ``confident it will have enough natural gas in storage to serve customer needs this winter,'' according to a statement Sempra made at a state energy meeting.

SCG, one of the largest gas utilities in the United States, serving about 18 million customers, made its statement in response to a recent state report on the natural gas market that claimed the company was ``at the greatest risk of having to choose between serving electric generators and storing sufficient gas for winter.''

State power officials have said California, which has already seen six days of rolling blackouts this year, faces as many as 260 hours of blackouts this summer, and any forced plant outages due to a shortage of fuel during heat waves would likely trigger blackouts.

SCG also said on Tuesday it was on schedule to replenishing its gas storage facilities, which are tapped during the winter to meet periods of high heating demand and to alleviate price spikes.

The state energy report, released in May by the California Energy Commission (CEC), also said Sempra's other utility unit -- San Diego Gas & Electric (SDG&E) -- would likely have to curtail gas deliveries this summer to power plants that are able to switch to petroleum-based fuels.

In response, SDG&E, which was forced to cut off gas deliveries to two power plants and some large industrial customers in January, said the report did not clearly define the basis for this claim nor whether there were any other factors that could be addressed ``to ameliorate any proposed curtailment.''

The Sempra statement, however, did not explicitly rule out the possibility of gas cuts to SDG&E customers.

A company spokeswoman said a recent SCG expansion of an in-state pipeline ``would help avoid curtailments.'' The line, which began service in May, carries around 70 million cubic feet of gas a day, roughly enough to drive a 400-megawatt power plant.

GET A GRIP ON PRICES

The CEC's draft energy report made a series of non-binding recommendations for California to get a grip on the state's natural gas prices, the highest in the nation.

The recommendations included building more pipelines to deliver gas to and within California, constructing more gas storage facilities, and increasing gas production in the state.

The steep rise in gas prices in California has been blamed on a number of factors, including the state's heavy reliance on gas-fired power plants, dwindling regional gas reserves and a lack of pipeline capacity.

A lack of hydropower imports from the drought-stricken Pacific Northwest, which has seen one of the driest winters on record, has also added to demand for gas-fired power generation and contributed to the rise in gas prices.

Wholesale gas entering the state at the Southern California (Socal) border, a major delivery point, has averaged more than double and triple the prices seen at most of other U.S. gas pipelines.

Soaring gas prices have triggered several investigations and lawsuits alleging market manipulation by out-of-state pipeline operators, which provide California with around 85 percent of its gas.

The pipeline companies have strongly denied the allegations.