-----Original Message-----
From: 	Jaquet, Tammy  
Sent:	Thursday, March 29, 2001 8:43 AM
To:	Gottsponer, Morgan; Donoho, Lindy; Lohman, TK
Subject:	SoCalGas to Make System Enhancements



SoCalGas to Make System Enhancements
Southern California Gas Co. confirmed plans to expand its intrastate gas transportation 
system and make enhancements to its storage facilities to help meet record-setting gas
 demand by electric generators in Southern California. SoCalGas Chairman Edwin A. Guiles
 informed California Public Utilities Commission President Loretta Lynch of the plans in a March 27 letter. 

He said the company had begun modifications to its system that will allow it to deliver an
 additional 175 MMcf/d by year end. SoCal's Lad Lorenz told NGI last week the company
 was planning to increase receipt point capacity at Wheeler Ridge where it interconnects
 with Kern River and Mojave, at the Needles compressor station where it interconnects 
with Transwestern Pipeline and at a receipt point for in-state production in the San Joaquin 
Valley (see Daily GPI, March 23). The Topock, AZ, border delivery point, which saw the 
sharpest price increases this winter, was not among the points slated for expansion because 
of the cost of expanding there. The company plans to add 85 MMcf/d of capacity at Wheeler
 Ridge, 50 MMcf/d at Needles and 40 MMcf/d for in-state production. 

"We are taking immediate action to increase compression horsepower at three delivery
 stations to boost the amount of natural gas that can be transported into The Gas Company's
 intrastate pipeline system," said Guiles. "In light of the uncertainties surrounding future demand
 for natural gas on The Gas Company's system, these modifications are the least cost way that
 we can be assured of meeting the gas demands of all of our customers and avoid any possibility
 for curtailments of service." Guiles said the proposed 5% increase in capacity would be enough 
to serve another 1.3 million residential customers per day or to power 1,200 MW of new baseload
 electric generation. 

"The improvements are consistent with SoCalGas' goals of maintaining as much as 20% more 
capacity than our requirements for periods of normal demand," he said. 

SoCalGas also is proposing some adjustments to its gas storage operations that will help increase
 the in-state supply of natural gas by 24 Bcf - or enough gas to serve a half million residential 
customers for one year - over the next year. It already has on file at the CPUC plans to abandon
 the Montebello storage field in Los Angeles County and withdraw the 10-12 Bcf of base and working
 gas that remains in the field. In addition, the company is planning to drill several new wells at its 
Aliso Canyon and La Goleta storage fields in order to remove 14 Bcf of base gas, split evenly 
between the two fields, and sell it into the market. The reduction in base gas is expected to have 
no impact on the amount of working gas capacity available in each field. 

Because of strong gas demand last summer, the levels of natural gas at the company's underground
 storage reservoirs reached near historic lows this winter. The LDC is encouraging non-core shippers 
to get a head start on storage injections this year because it expects demand to remain strong in 2001. 

"Our goal for this year is to have no curtailments of gas service to our customers, but we need to maximize 
the use of our existing intrastate capacity in order to reach our goal," said Guiles. "We're telling our large 
industrial and electric generation customers that the best way that they can avoid curtailments next winter 
is to make full use of the available pipeline space and put natural gas in storage whenever possible, 
particularly during the second quarter of this year. 

"I believe that, if undertaken, these proposals will have a positive impact on reliability next winter," said Guiles.