EDITORS: Please do not use
"Pacific Gas and Electric" or "PG&E" when
referring to PG&E Corporation or its National Energy Group.
The PG&E National Energy Group is not the same company as Pacific
Gas and Electric Company, the utility, and is not regulated by the
California Public Utilities Commission. Customers of Pacific Gas
and Electric Company do not have to buy products or services from
the National Energy Group in order to continue to receive quality
regulated services from Pacific Gas and Electric Company.
AGREE TO PROVIDE NATURAL GAS
SAN FRANCISCO -- Pacific
Gas and Electric Company announced today that five of its natural
gas suppliers -- BP Energy Company, Texaco Natural Gas Inc., Dynegy
Marketing and Trade (all of Houston), Texaco Canada Petroleum Inc.
and Dynegy Canada Marketing and Trade (both of Canada) -- have agreed
to continue selling gas to the utility as part of an arrangement
giving them a security interest in future revenues collected from
While the news that these
five suppliers will continue gas deliveries provides a reason to
be optimistic, these suppliers alone cannot provide enough natural
gas to avert severe shortages in the coming days or weeks. Pacific
Gas and Electric Company will continue to work with its remaining
20-25 suppliers to persuade them to sign on to the utility's proposal
and keep gas flowing to the utility's 3.8 million gas customers
in Northern and Central California.
"We're very pleased that
several of our suppliers have agreed to keep gas flowing this winter
to millions of Californians who rely on natural gas for heat and
hot water," said Gordon R. Smith, president and CEO of Pacific Gas
and Electric Company. "The energy crisis has made normal business
operations very difficult these past few months, so it is rewarding
to see the hard work and creativity put into this proposal pay off.
If additional suppliers sign on to our proposal in the next few
days, we remain hopeful we can avoid what otherwise threatens to
be a very serious gas shortage."
The U.S. Department of Energy
order that has kept gas flowing since January 19 is set to expire
at midnight tonight (February 6). Should any of Pacific Gas and
Electric Company's gas suppliers stop delivery, the shortfall would
have to be covered by gas in storage, or by whatever other purchases
the utility is able to make. If storage gas is depleted, widespread
gas curtailments that affect residential and business customers
become more likely. The utility currently has approximately nine
days' worth of gas in storage, if it were forced to rely mainly
on storage gas with only a small amount of supplies flowing into
At this time, two major
suppliers have informed Pacific Gas and Electric Company that they
will cut off natural gas supplies to California when the federal
order expires at midnight. They are J. Aron & Co. (the gas trading
arm of New York-based Goldman Sachs) and Western Gas Resources of
Denver. These two suppliers combined provide more than 10 percent
of the natural gas used by Pacific Gas and Electric Company customers.
The California Public Utilities
Commission approved Pacific Gas and Electric Company's proposal
to offer gas suppliers a security interest in future gas customer
accounts receivable on Jan. 31. The utility had requested the authorization
because nearly all of its suppliers had requested special payment
arrangements that the utility could not accommodate because of its
poor financial condition.