Pacific Gas and Electric Company and TURN Join to Help Customers Manage High Natural Gas Prices This Winter

SAN FRANCISCO, Nov. 3 /PRNewswire-FirstCall/ — Pacific Gas and Electric Company announced two major new initiatives to help consumers manage the high natural gas prices hitting California and the nation this winter. The initiatives were developed in consultation with The Utility Reform Network (TURN), and are supported by the consumer group.

“This winter’s high natural gas prices call for utilities to be creative and resourceful in assisting their customers,” said Peter A. Darbee, PG&E Corporation President and CEO. “We are answering that call with the Winter Gas Savings Program. By becoming the first utility in the country to launch this kind of program, we’re letting customers know they can count on PG&E for help.”

The two-part Winter Gas Savings Program includes a conservation incentive program — offering customers a 20 percent discount for reducing their gas usage by 10 percent or more — and a winter gas cost deferral program, which would postpone collection of nearly nine percent of winter gas costs until the spring and summer months, when bills are much lower. The combination of a conservation incentive program, coupled with a deferral of a portion of winter gas costs, would provide significant reductions in winter bills for PG&E’s gas customers.

Combined, the two elements of PG&E’s proposed Winter Gas Savings initiatives are expected to reduce winter gas bills significantly for the successful 10/20 program participant. For example, the average residential customer who succeeds in the 10/20 program will be expected to reduce winter gas costs by about $200, a 36 percent reduction in the gas costs they would otherwise be billed in the winter. (Note: About $60 of the reduction would come as a one-time rebate in April or May, as a result of the 10/20 program described below.)

Recognizing the severity of this winter’s high natural gas prices, PG&E and TURN came together to work on ways to help consumers manage their energy costs. The California Public Utilities Commission (CPUC) has also been focusing attention on high gas prices, and has directed California utilities to increase their efforts to provide customers with additional assistance this winter.

Natural gas prices are at record-high levels across the country, due to high demand for the fuel and the disruption of a significant portion of the nation’s overall supply caused by hurricane damage to the natural gas infrastructure in the Gulf of Mexico. Natural gas bills for PG&E’s customers for the remainder of the winter are expected to be 50-60% higher compared to last year; bills are increasing much more elsewhere in the country.

PG&E buys natural gas from suppliers and provides it to customers at cost. As a result PG&E does not profit from higher natural gas prices. Instead, PG&E is paid a set fee to deliver gas, which doesn’t change when gas prices go up.

About the Proposed 10/20 Winter Gas Savings Program

The new 10/20 Winter Gas Savings Program is modeled after the summer 20/20 program, created to promote electric conservation in 2005, 2002 and 2001. Under this new, winter natural gas savings program, residential and small business customers who reduce their natural gas usage from January 1 through March 31, 2006 by 10 percent or more compared to the same months last winter would earn a 20 percent rebate on natural gas charges for those months. Customers who reach the goal will save twice — 10 percent or more each month in reduced usage charges, and then another 20 percent rebate for the months of January-March (the rebate would appear on the bill customers receive in April or May).

Under the proposed 10/20 Winter Gas Savings Program, an average residential gas customer who successfully participates in the 10/20 program by reducing their gas usage, is expected to save about $90 due to conservation and get an incentive bill rebate payment of about $60, for a total reduction of 30 percent on their December-March winter gas costs. (Note: Successful 10/20 participating customers are expected to reduce usage by an average of 23%, based on the incentive and expected conservation in response to price signals this winter. Participants who conserve just 10 percent would earn approximately $40 in conservation savings, and a $70 rebate.) Successful participants in the 10/20 Winter Gas Savings program are expected to earn bill rebates totaling approximately $200 million in April and May 2006.

In order to succeed, customers will need to reduce their cumulative usage over the three months of the program by at least 10 percent. For example, if a customer reduces gas usage by only 8 percent in January, they can still qualify for the rebate by reducing 12 percent or more the following month. As long as the three month reduction collectively totals at least 10 percent or more, the customer would reap the reward.

There would be no sign up required. Customers would be automatically enrolled and would be notified of eligibility in a message on their January bills. To qualify, customers must have been at their current location (home or business) since January 1, 2005 and remain on their current rate schedule.

About the Winter Cost Deferral Proposal

The Winter Cost Deferral program will help to lower bills during the coldest winter months (December — February) for residential and small commercial gas customers by deferring recovery of an estimated $250 million in gas revenues from the winter to the spring and summer period. The proposed Winter Cost Deferral program is expected to reduce the average residential customer bill by about $50 during the winter months, or about nine percent, and increase the average bill for the next seven months (April through October) by about the same total amount, but spread out over a longer period and added to bills that are much lower than in the winter.

Next Steps

PG&E, with TURN’s support, will submit a request to the CPUC, asking for permission to offer this two-part program to customers this winter. Given the importance of quick action in the face of looming gas cost increases, it is hoped the CPUC will be able to act on this initiative at its November 18 meeting, allowing the program to start at the beginning of December 2005.

PG&E’s Efforts to Assist Customers This Winter

PG&E already has launched several other initiatives to help customers combat higher energy bills this winter, including: obtaining regulatory approval to expand enrollment in the low-income CARE program which provides a 20% discount on utility bills, jump-starting a consumer rebate program to encourage the purchase of gas-efficient appliances, and significantly expanding the utility’s bill-leveling Balanced Payment Plan to more customers. To help meet the needs of its low-income customers, PG&E has stepped up funding for the utility’s Relief for Energy Assistance through Community Help program (REACH), which provides a $200 grant to customers who are at risk of having their gas and electricity service disconnected. PG&E has pledged to double the program’s budget from $1.5 million to $3 million for this winter. PG&E has also undertaken a major natural gas purchasing strategy that will help mitigate price spikes in consumers’ gas bills this winter.

For More Information on Energy Savings Programs Visit http://www.pge.com/

Pacific Gas and Electric Company

CONTACT: PG&E News Department, +1-415-973-5930

Web site: http://www.pge.com/