----- Forwarded by Jeff Dasovich/NA/Enron on 03/30/2001 10:54 AM -----

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 
<http://intelligencepress.com/subscribers/daily/news/d20010323g.html>). 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.