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Date: Tue, 01 May 2001 10:14:50 -0500
From: "Tracey Bradley" <tbradley@bracepatt.com>
To: "Aryeh Fishman" <afishman@bracepatt.com>, "Andrea Settanni" 
<asettanni@bracepatt.com>, "Charles Shoneman" <cshoneman@bracepatt.com>, "Dan 
Watkiss" <dwatkiss@bracepatt.com>, "Kimberly Curry" <kcurry@bracepatt.com>, 
"Paul Fox" <pfox@bracepatt.com>, "Ronald Carroll" <rcarroll@bracepatt.com>, 
"Randall Rich" <rrich@bracepatt.com>
Subject: Calif. introduces four bills to cut natgas prices
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FYI

Calif. introduces four bills to cut natgas prices

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SACRAMENTO, Calif., April 30 (Reuters) - A package of four legislative bills 
with bipartisan support was introduced in California on Monday aimed at 
reducing natural gas prices, currently the highest in the nation and a key 
reason behind the state's ongoing energy crisis.

"We introduced these bills today and we think they will bring natural gas 
prices down in California," said Ed Randolph, a spokesman for Joe Canciamilla 
(D-Pittsburg), an author of one of the bills.

California's power crisis, which has already led to rolling blackouts across 
the state on four days this year, has been exacerbated by a spike in gas 
prices.

Natural gas-fired turbines are the single largest source of electricity in 
California, providing more than a third of the power used by the state's 34 
million residents.

Randolph said Democratic and Republican members on the Assembly's gas 
subcommittee were involved in drafting the proposals.

The four bills could go to full committee for debate in the next week or two, 
he said.

These latest legislative initiatives follow a flurry of other state proposals 
to cap gas prices and to jail and slap financial penalties on anyone 
convicted of manipulating gas and power prices.

The bills seek to streamline the approval processes for building underground 
gas storage facilities, encourage in-state gas production, direct state 
energy regulators to review all current or proposed gas tariffs, and require 
regulators to review all applications to build new pipelines within 12 months.

Under the gas production proposal, lower grade gas would be tapped to meet 
industrial demand.

"This measure will allow this otherwise unusable gas to be sold to 
industrials that can burn it but currently must use the higher grade gas 
since that is all that is available to them," a statement from Canciamilla's 
office said.

The huge rise in gas prices in the Golden State has been blamed on a number 
of factors including the state's heavy reliance gas-fired power plants, 
dwindling regional gas reserves, and a lack of pipeline capacity to bring 
more gas into the state.

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

On Monday, Socal prices traded on average at $14.50 per million British 
thermal units, compared with $3.13 a year ago.

The astronomical rise in California gas prices has also triggered several 
investigations and lawsuits into possible anti-competitive practices by 
out-of-state pipeline operators, which provide California with around 85 
percent of its gas.




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Copyright , 2001 Reuters Limited.