SDG&E and SoCalGas
2016 Natural Gas Cost Allocation Proceeding
Phase 1: Natural Gas Rates
every three years SDG&E and SoCalGas propose how to allocate the costs of
their natural gas storage operations across various customer classes. This
Triennial Cost Allocation Proceeding (TCAP) also address other policy issues
related to natural gas storage.
December 2014, SDG&E and SoCalGas filed an Application with
the CPUC requesting to increase their natural gas rates effective January 1,
2016. If approved, the average monthly household gas bill would increase by:
$0.02 (less than 0.1% increase)
2017 - 2019: $0.09 (0.2% increase)
$0.07 (0.2% increase)
2017 - 2019: $0.06 (0.3% increase)
utilities requested to modify their current allocation of gas storage costs by:
costs of natural gas storage (how the utilities recover costs of their gas
gas storage cost allocation across customer groups (for example,
residential/small commercial and industrial).
functions of the utilities’ gas system operations.
the amount of gas that can be injected into storage facilities on behalf of
each customer group.
revenue-sharing percentage for the commercial storage program, which shares
profits from commercial gas sales between ratepayers and utility
Proposed Settlement Agreement
August 31, 2015, ORA, SoCalGas, SDG&E, and other consumer and industry
stakeholders submitted a proposed Settlement
agreement, proposing a compromise that would:
the storage revenue-sharing percentage at 75% ratepayer, 25% utility
shareholder, a midpoint between the utilities’ proposed position and the
to each customer group the right to use different proportions of utility gas
storage facilities depending on the season, but with sufficient protections
for residential and small commercial ratepayers. Using natural gas storage
allows customer groups to store gas for critical periods and protect against
the transparency requirement for SoCalGas to post prices of commercial gas
SoCalGas to recover the costs of running its compression turbines.
8% monthly balancing, a measure of how closely gas importers must balance
their predictions of imports with their actual imports into the natural gas
CPUC Proposed Decision
On May 17, 2016, the CPUC issued a Proposed Decision, which would adopt uncontested requests as well as the Settlement Agreement, which resolves contested issues.
hearings were held August 3 – 5, 2015 at the CPUC in San Francisco. A
final Decision is expected in 2016.
supports the Settlement Agreement because it allows SoCalGas and SDG&E to
operate their systems safely and reliably, as well as maintains ratepayer
protections and transparency in the natural gas storage market. Additionally,
the Settlement is consistent with ORA’s position and resolves other concerns.
The Settlement would:
ORA’s proposed percentage regarding the commercial storage revenue-sharing
programs, which is good for ratepayers because it will ensure the utilities
have incentives to manage sales efficiently, while providing ratepayer
protections and benefits.
the utilities’ proposal for seasonal injection periods with protections
for the residential / small commercial customer group to ensure enough
capacity is available when needed.
ORA’s proposal to maintain the requirement to post natural gas sale
prices, which will ensure market transparency.
ORA's June 22, 2015 Testimony.
the CPUC’s Proceeding docket.
the docket to subscribe to updates to this proceeding.