Subject: FW: NGI Article on SoCalGas GCIM
From: [email-masked]
To: [email-masked]
Cc: [email-masked]
Date: Fri, 10 Aug 2001 08:24:12 -0700 (PDT)

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: 	Hewitt, Jess  
Sent:	Friday, August 10, 2001 10:17 AM
To:	Cantrell, Rebecca W.
Subject:	Re:

why would both options require a hike in the proposed rates?

From:	Rebecca W Cantrell/ENRON@enronXgate <mailto:Cantrell/ENRON@enronXgate> on 08/10/2001 10:03 AM
To:	Phillip K Allen/ENRON@enronXgate <mailto:Allen/ENRON@enronXgate>, "Alvarez, Ray" <[email-masked] <mailto:[email-masked]>>@SMTP@enronXgate, Don Black/HOU/EES@EES <mailto:Black/HOU/EES@EES>, Alan Comnes/ENRON@enronXgate <mailto:Comnes/ENRON@enronXgate>, Mark Courtney/HOU/EES@EES <mailto:Courtney/HOU/EES@EES>, Jeff Dasovich/ENRON@enronXgate <mailto:Dasovich/ENRON@enronXgate>, Frank Ermis/ENRON@enronXgate <mailto:Ermis/ENRON@enronXgate>, Robert Frank/ENRON@enronXgate <mailto:Frank/ENRON@enronXgate>, Donna Fulton/Corp/Enron@ENRON <mailto:Fulton/Corp/Enron@ENRON>, Scott Gahn/HOU/EES@EES <mailto:Gahn/HOU/EES@EES>, Mike Grigsby/ENRON@enronXgate <mailto:Grigsby/ENRON@enronXgate>, Jess Hewitt/HOU/EES@EES <mailto:Hewitt/HOU/EES@EES>, Keith Holst/ENRON@enronXgate <mailto:Holst/ENRON@enronXgate>, Paul Kaufman/ENRON@enronXgate <mailto:Kaufman/ENRON@enronXgate>, Harry Kingerski/ENRON@enronXgate <mailto:Kingerski/ENRON@enronXgate>, Leslie Lawner/ENRON@enronXgate <mailto:Lawner/ENRON@enronXgate>, Susan J Mara/ENRON@enronXgate <mailto:Mara/ENRON@enronXgate>, Stephanie Miller/ENRON@enronXgate <mailto:Miller/ENRON@enronXgate>, Christi L Nicolay/ENRON@enronXgate <mailto:Nicolay/ENRON@enronXgate>, Dave Perrino/ENRON@enronXgate <mailto:Perrino/ENRON@enronXgate>, Roger O Ponce/HOU/EES@EES <mailto:Ponce/HOU/EES@EES>, Greg Sharp/HOU/EES@EES <mailto:Sharp/HOU/EES@EES>, Kristann Shireman/HOU/EES@EES <mailto:Shireman/HOU/EES@EES>, Matt Smith/ENRON@enronXgate <mailto:Smith/ENRON@enronXgate>, James D Steffes/ENRON@enronXgate <mailto:Steffes/ENRON@enronXgate>, Scott Stoness/HOU/EES@EES <mailto:Stoness/HOU/EES@EES>, Jane M Tholt/ENRON@enronXgate <mailto:Tholt/ENRON@enronXgate>, Jennifer Thome/ENRON@enronXgate <mailto:Thome/ENRON@enronXgate>, Barry Tycholiz/ENRON@enronXgate <mailto:Tycholiz/ENRON@enronXgate>, Steve Walton/ENRON@enronXgate <mailto:Walton/ENRON@enronXgate>
cc:	 
Subject:	

Well, this is interesting.  Are they talking about the same period during which gas costs were supposed to have been so unreasonably, and allegedly illegally, high due to the actions of those greedy Texas energy firms?

NGI's Daily Gas Price Index 
published : August 10, 2001
SoCalGas Posts $223 Million in Gas-Cost Savings 
California regulators may be scratching their heads about what to do with gas purchasing incentives for the state's major utilities following Southern California Gas Co.'s filing that claims its purchases over a 12-month period ending last June were $223 million below market prices. 
It was the "largest amount of savings on gas costs during any one-year period 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. 
Under a regulator-approved "gas cost incentive mechanism (GCIM) that has been 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 to the utility "to take reasonable risks to keep gas costs low, while ensuring a reliable supply," SoCalGas's director of gas acquisition, Jim Harrigan, told employees in the recent report. 
With this relatively embarrassing "windfall" for shareholders, the utility recommended to the California Public Utilities Commission in June two options for spreading the wealth: 
1.	Give shareholders a relatively modest $30.8 million and make the utility's proposed adjustments to the GCIM program in future years. The modifications were agreed to many months ago in a settlement among SoCalGas; the CPUC; the Office of Ratepayer Advocates (ORA); and the statewide utility consumer group TURN (The Utility Reform Network); or 
2.	Award $106 million to the utility's shareholders, which is what SoCalGas says is the shareholders' share under the current GCIM formula. 
Both options carry proposed rate increases to implement them. The first would necessitate a 44 cents/month increase for a 12-month period, while the second alternative would require a $1.52/month hike for one year.