NATURAL GAS POOL
ABOUT THE GAS POOL
Who May Participate?
The ABAG POWER Core and Non-Core Aggregation programs are open to all local governments and
special districts in the Pacific Gas and Electric (PG&E) service territory.
What is a Core Aggregation Program?
A Core Aggregation Program allows customers to aggregate their
natural gas accounts together with others
for the sake of purchasing natural gas in bulk from a third party
supplier. In order to participate in a Core Aggregation Program, customers
must sign up with a Core Transport Agent. ABAG POWER is the Core Transport Agent
for the ABAG POWER Natural Gas Purchasing Program. In this role, ABAG POWER:
- purchases natural gas for all participants;
- provides PG&E with nominations;
- contracts and pays for interstate pipeline charges;
- provides gas balancing service;
- provides consolidated billing for natural gas, transportation and distribution;
- coordinates gas storage requirements; and
- brokers excess gas and pipeline capacity.
Larger accounts (over 20,800 therm/month) may join ABAG POWER's non-core program and take advantage of reduced transportation and dist
ribution rates not available to PG&E customers.
Through a Natural
Gas Sales and Aggregation Agreement, participants designate ABAG POWER as
their exclusive agent in performing these functions and agree to pay ABAG POWER
all natural gas charges, including operational and administrative
costs.
ABAG POWER's Natural Gas Rate
ABAG POWER's natural gas rate is set periodically by an Executive Committee made up of members of the
purchasing pool. In setting this rate, ABAG POWER strives to balance the goals of members to achieve
both price stability and cost savings. This rate may be either fixed or variable (or a combination
of the two) depending on the gas purchasing strategy approved by the Committee. Please contact
staff to find out the latest rate structure.
ABAG POWER's Fees
Fees to cover the operational expenses of the program are set annually by the Executive Committee.
These fees cover expenses such as: gas scheduling and management; billing services; legal services,
and administration. Currently these fees represent approximately 3.8% of the program budget.
Reliability and Maintenance
Participation in ABAG POWER's Program assures no change in participant's
current priority of service with Pacific Gas and Electric Company (PG&E),
quality of natural gas, overall reliability of service and performance of
maintenance. PG&E will continue to provide meter reading, "on the
ground" repair and maintenance, and emergency response to all
participants.
Single Bill System
Participants will receive a single monthly bill for gas service from
ABAG POWER, even though the gas and the distribution services will be provided
by different companies. In addition, the ABAG POWER bill will consolidate all
your accounts into one summary bill.
Other Benefits
In addition to natural gas savings, participation in the Pool has
definite longer term benefits. Participants will be represented on ABAG POWER's
Executive Committee. This Committee will provide
policy guidance and be instrumental in formulating future purchasing
recommendations.
ABAG POWER continues to follow the issues and regulatory actions involving energy
deregulation in order to keep our members up to date with the latest information. ABAG
POWER has also become involved with energy efficiency initiatives that may be of
significant benefit to members.
PG&E's Position on the ABAG POWER Natural Gas Program
PG&E's corporate policy is to
encourage the formation of programs like ABAG POWER's. PG&E would like to
see more of their natural gas customers securing their gas supply from
other suppliers. However, this is not always known or understood by PG&E's
community representatives who attend Council and Board meetings. With PG&E's
assistance, ABAG POWER is taking steps to educate these representatives about
our program.
FREQUENTLY-ASKED QUESTIONS ABOUT ABAG POWER'S
NATURAL GAS CORE AGGREGATION PROGRAM
1. In the event ABAG POWER's gas supplier was to fail to supply natural
gas to the PG&E system, what physical and financial risks do
participants assume?
Physical risk: Because PG&E's natural gas system is a
fully-pressurized pipeline system capable of delivering natural gas at all
times to the burner tip, there is no possibility that participants will
find themselves without natural gas service due to a default of ABAG POWER's gas
supplier.
Financial risk: In the event, ABAG POWER's gas supplier was to
default, ABAG POWER would attempt to obtain a natural gas supply for members at
the same price. In the event, ABAG POWER was unable to find replacement gas
supplies at that price, participants
would have the option of either returning to PG&E at their previous
rates or securing another third party supplier of their choice.
2. What liabilities or risks do participants assume if ABAG POWER chooses
to issue a short-term financing to either pay for required deposits or to
prepay the natural gas supplier (for an additional discount in the price
of natural gas)?
The Agency's Natural Gas Sales and Aggregation Agreement with ABAG POWER may be
used as security for a short term financing in ABAG POWER's name. In the event
ABAG POWER issues a note and then defaults on its payments, the bank trustee for
the note would step into ABAG POWER roles as Core Transport Agent and continue
the program. The participant's legal obligation in this event is limited
to fulfilling the terms of its Agreement with ABAG POWER (i.e., to pay for all
natural gas and transportation charges for natural gas consumed by the
entity.)
3. Will joining ABAG POWER's pool negatively affect the City or County's
franchise fees?
No. When an account becomes a part of the ABAG POWER gas pool it ceases to pay the procurement
portion of the franchise fees (local governments are exempt from tariff G-SUR). At the same time
PG&E ceases to remit this portion of the fees to the City or County. The City or County
therefore remains financially indifferent.
4. How will ABAG POWER's administrative fees be determined in the future?
Each participants who joins the ABAG POWER program will appoint a member to
the ABAG POWER Board of Directors. The Board of Directors is the ultimate authority for all actions taken by ABAG P
OWER. In addition, members will have the opportunity to join the ABAG POWER Executive Committee. The Committee will
oversee the operation of the Pool, approve purchasing strategies, and
determine appropriate administrative fees.
GAS PURCHASING POOL PARTICIPANTS
City of Alameda
City of Albany
City of Benicia
City of Cupertino
City of Fremont
City of Gonzales
City of Half Moon Bay
City of Hercules
City of Los Altos
City of Mill Valley
City of Millbrae
City of Milpitas
City of Monte Sereno
City of Oakland
City of Orinda
City of Pacifica
City of Petaluma
City of Pleasanton
City of Richmond
City of Salinas
City of San Carlos
City of San Rafael
City of Santa Rosa
City of Saratoga
City of Union City
City of Vallejo
City of Watsonville
City of Winters
County of Contra Costa
County of Napa
County of San Mateo
County of Santa Clara
Town of Atherton
Town of Moraga
Eastside Union High School District
Golden Gate Bridge, Highway and Transportation District
Regional Administration Facility Corporation
Vallejo Sanitation & Flood Control
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