The remaining 25 percent of the California customers are in the noncore commercial and industrial sectors. Most of these have agreements with marketers to provide their gas supplies. Foreseeing that prices could be high for the winter, some of these noncore customers have made arrangements to have gas at prices that are below current border prices. Unfortunately, some of the commercial and industrial customers did not have the same foresight and have gas contracts indexed to prices at the California Border. Finally, maybe 10 percent of the supply for all customers is purchased on the spot market to meet fluctuating demand levels.
Electric generation continues to generate as they can pass through their gas costs up to some point.
What that point is will depend on the price their affiliates sell the gas to them and the price for electricity. In the noncore sectors, fallout is beginning to occur. Given the high prices for gas, commercial and industrial sectors are cutting back on fuel use. Some, as paper mills in Redding, Stockton and Ripon have decided to shut down for a limited period. Others nocore customers, with alternative fuel capability, are seeking out that supply.