To summarize recent events and potential impacts on customers, we've prepared a review of the natural gas supply situation in Northern and Central California. If you have any questions or concerns, please do not hesitate to contact your Pacific Gas and Electric Company Account Representative. The electric supply problem has become a natural gas supply problem as well. First, winter heating demand has combined with demand from natural gas-fired thermal electric generators to drive up usage and the price of natural gas.
Supplies are tight.
Second, in January, concerned with the Company's financial position, several of Pacific Gas and Electric Company's major natural gas suppliers stopped, or threatened to stop, delivery of natural gas intended for utility-supplied core customers. If the Company is unable to obtain sufficient supplies for the core customers it serves, it may be forced to divert noncore gas supplies. This could reduce or eliminate supplies to large users, including industry, refineries and power plants. And if supplies otherwise intended for noncore customers are insufficient to meet the needs of core customers, then suspension of gas service to all customers in certain regions may become necessary, in order to maintain supplies for other regions. We informed Governor Davis of the problem on Jan. 9, and asked him to consider using his emergency powers to help avert gas shortages by providing financial assistance to meet gas suppliers' demands.