TITLE
Recommendation to adopt resolution authorizing City Manager, or designee, to adjust certain natural gas transmission 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; and
DISCUSSION
The Energy Resources Department (ER) operates and maintains a pressurized natural gas pipeline distribution system that consists of over 1,900 miles of underground pipelines and approximately 154,000 customer meters. ER’s existing natural gas pipeline system includes both steel and polyethylene pipes, with 52 percent of the pipeline system in service today having been installed in the 1930s through the 1960s, and a very small percentage installed in the 1920s. Due to the correlation between the age of natural gas pipeline systems and the consequent potential for leaks to occur, it is imperative that ER continually reinvest ratepayer revenues into its natural gas pipeline system to safely maintain operations.
To ensure safe and reliable natural gas pipeline systems nationwide, federal and state regulators have increased their oversight of how natural gas pipeline systems are to be safely operated and maintained. Compliance with these regulations, along with other safety and environmental requirements, has financially impacted natural gas utilities nationally as well as statewide. Over the past four years, the California Public Utilities Commission (CPUC) has authorized multiple increases to the rates charged by the Southern California Gas Company (SoCalGas) and San Diego Gas & Electric (SDG&E) to their ratepayers. Most recently, on January 1, 2020, the CPUC authorized a rate increase for SoCalGas that resulted in its residential natural gas transmission rates now being 32 percent higher than ER’s current residential natural gas transmission rates.
The CPUC authorized the rate increases to provide SoCalGas and SDG&E the necessary revenues to fund replaceme...
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