Message-ID: <33244562.1075851595524.JavaMail.evans@thyme> Date: Fri, 10 Aug 2001 08:24:12 -0700 (PDT) From: w..cantrell@enron.com To: jeff.dasovich@enron.com Subject: FW: NGI Article on SoCalGas GCIM Cc: jess.hewitt@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: quoted-printable Bcc: jess.hewitt@enron.com X-From: Cantrell, Rebecca W. X-To: Dasovich, Jeff X-cc: Hewitt, Jess X-bcc: X-Folder: \Dasovich, Jeff (Non-Privileged)\Dasovich, Jeff\Deleted Items X-Origin: DASOVICH-J X-FileName: Dasovich, Jeff (Non-Privileged).pst Jeff - Can you answer Jess's question? I wondered the same thing myself. = It doesn't make much sense to raise the rates in order to make payments to = the customers. -----Original Message----- From: =09Hewitt, Jess =20 Sent:=09Friday, August 10, 2001 10:17 AM To:=09Cantrell, Rebecca W. Subject:=09Re: why would both options require a hike in the proposed rates? From:=09Rebecca W Cantrell/ENRON@enronXgate on 08/10/2001 10:03 AM To:=09Phillip K Allen/ENRON@enronXgate , "Al= varez, Ray" >@SMTP@enr= onXgate, Don Black/HOU/EES@EES , Alan Comnes/ENRO= N@enronXgate , Mark Courtney/HOU/EES@EES , Jeff Dasovich/ENRON@enronXgate , Frank Ermis/ENRON@enronXgate , Robert Frank/ENRON@enronXgate , Donn= a Fulton/Corp/Enron@ENRON , Scott Gahn/HOU/= EES@EES , Mike Grigsby/ENRON@enronXgate , Jess Hewitt/HOU/EES@EES , Keith Holst/ENRON@enronXgate , Paul Kaufm= an/ENRON@enronXgate , Harry Kingerski/ENRO= N@enronXgate , Leslie Lawner/ENRON@enron= Xgate , Susan J Mara/ENRON@enronXgate , Stephanie Miller/ENRON@enronXgate , Christi L Nicolay/ENRON@enronXgate , Dave Perrino/ENRON@enronXgate , Roger O Ponce/HOU/EES@EES , Greg Sharp/HOU/E= ES@EES , Kristann Shireman/HOU/EES@EES , Matt Smith/ENRON@enronXgate , James D Steffes/ENRON@enronXgate , = Scott Stoness/HOU/EES@EES , Jane M Tholt/ENRON@= enronXgate , Jennifer Thome/ENRON@enronXgate= , Barry Tycholiz/ENRON@enronXgate , Steve Walton/ENRON@enronXgate cc:=09=20 Subject:=09 Well, this is interesting. Are they talking about the same period during w= hich gas costs were supposed to have been so unreasonably, and allegedly il= legally, high due to the actions of those greedy Texas energy firms? NGI's Daily Gas Price Index=20 published : August 10, 2001 SoCalGas Posts $223 Million in Gas-Cost Savings=20 California regulators may be scratching their heads about what to do with g= as purchasing incentives for the state's major utilities following Southern= California Gas Co.'s filing that claims its purchases over a 12-month peri= od ending last June were $223 million below market prices.=20 It was the "largest amount of savings on gas costs during any one-year peri= od in our 134-year history" of SoCalGas, which is owned by San Diego-based = Sempra Energy, according to Anne Smith, a vice president quoted in a report= to the company's employees.=20 Under a regulator-approved "gas cost incentive mechanism (GCIM) that has be= en in place in recent years, the utility can apply a formula allowing it to= share the savings between customers and shareholders." It's an incentive t= o the utility "to take reasonable risks to keep gas costs low, while ensuri= ng a reliable supply," SoCalGas's director of gas acquisition, Jim Harrigan= , told employees in the recent report.=20 With this relatively embarrassing "windfall" for shareholders, the utility = recommended to the California Public Utilities Commission in June two optio= ns for spreading the wealth:=20 1.=09Give shareholders a relatively modest $30.8 million and make the utili= ty's proposed adjustments to the GCIM program in future years. The modifica= tions were agreed to many months ago in a settlement among SoCalGas; the CP= UC; the Office of Ratepayer Advocates (ORA); and the statewide utility cons= umer group TURN (The Utility Reform Network); or=20 2.=09Award $106 million to the utility's shareholders, which is what SoCalG= as says is the shareholders' share under the current GCIM formula.=20 Both options carry proposed rate increases to implement them. The first wou= ld necessitate a 44 cents/month increase for a 12-month period, while the s= econd alternative would require a $1.52/month hike for one year.=20