TITLE
Recommendation to adopt resolution authorizing City Manager to adjust certain rates for natural gas service to reflect market conditions by implementing Gas Rate Schedules 1 through 5, 7, 9, and special conditions and incentives in Exhibits A and B. (Citywide)
DISCUSSION
The Department of Long Beach Gas and Oil (LBGO) operates and maintains a pressurized natural gas pipeline system that consists of over 1,900 miles of aging underground pipelines and approximately 150,000 gas meters. The pipeline system includes both steel and plastic pipes, with the bulk of the current system installed from the 1930s through the 1960s, with some pipelines installed in the 1920s still in operation. With a clear correlation between the age of the pipeline and the vulnerability to leakage, it is imperative that LBGO continually reinvest gas ratepayer revenues into pipeline infrastructure to maintain safe operation.
In order to ensure safe and reliable natural gas systems nationwide, federal and state regulators have increased oversight of how natural gas utility systems are operated and maintained. Compliance with these regulations, along with other safety and environmental requirements, has financially impacted gas utilities statewide. The California Public Utilities Commission (CPUC) recently authorized increases to the gas transmission rates charged by Southern California Gas Company (SoCalGas) and San Diego Gas & Electric (SDG&E) to ratepayers effective January 1, 2016. The CPUC approved these rate increases to provide SoCalGas and SDG&E the necessary monies to fund replacement of aging natural gas pipeline infrastructure, to fund pipeline integrity programs as required by federal regulations, and to facilitate compliance with federal and state environmental regulations. With like regulatory, environmental, and operational requirements for its own gas utility’s operation, LBGO’s utility costs are impacted similarly to those of other California gas utilities.
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