CONTACT: Kyle DeVine September 26, 1997 CPUC - 557
213-897-4225 (A.96-03-031)

CPUC APPROVES SOCALGAS RATE INCREASE, SUBJECT TO REFUND

The California Public Utilities Commission (CPUC) will permit Southern California Gas Company (SoCalGas) to raise customer's rates to collect an extra, unanticipated $87 million in costs to purchase gas for its customers. But the Commission will review the costs and any expenses found unreasonable will be refunded to customers.

The $86.9 million to be collected from residential customers will be amortized over 12 months, resulting in a 2.8 cents per therm increase in rates. This will increase the monthly bill by $1.40 for the customer who uses the systemwide average of 50 therms a month.

The $633,000 to be collected from commercial and industrial customers will be collected over a one-month period at 3 cents per therm.

The $87 million extra costs, or undercollection as referred to in industry terms, is different than what the utility estimated in March 1996 when it estimated an excess of revenues, or overcollection, of $120 million. As part of its review of the $87 million undercollection, the CPUC will be reviewing the utility's gas storage operation for core customers who rely on SoCalGas for all their natural gas needs. Among many issues to be examined, the Commission has ordered SoCalGas to explain if gas stored for core customers was used for noncore customers, and why SoCalGas chose to purchase gas for core customers during the winter months when gas cost are high, rather than suspending gas delivery for customers on standby service or curtailing noncore customers and using that gas.