Shrinkage Shrinks

Thursday, March 24, 2005

Effective October 1, 2000, PG&E's shrinkage rates will be reduced as follows:

Service Level of

End-Use Customer

Transmission Shrinkage

Distribution Shrinkage

Total Shrinkage Rate

Noncore Transmission



Noncore Distribution






This represents a significant reduction from the current transmission shrinkage rate of 1.73%, and the current distribution rates of 0.22% for noncore and 4.02% for core. Shrinkage for the Redwood Off path (1.11%) and the Mission paths (0.00%) remains unchanged.

PG&E makes this reduction to more closely match the amount of shrinkage gas currently required to operate PG&E's system. Shrinkage gas is necessary to provide compressor fuel and to replace lost and unaccounted for gas supplies.

The California Public Utilities Commission approved these rates on an interim basis until new shrinkage allowances are adopted in PG&E's 2000 Biennial Cost Allocation Proceeding (BCAP). A decision in the 2000 BCAP is not expected until 2001.

The sample calculations below illustrate how to determine receipt quantities based on the updated shrinkage rates.

For noncore transmission-level end-use customers, or for deliveries to the Citygate:

Receipt Point Quantity = Quantity Desired at Delivery Point / (1 - x)

where x equals the decimal equivalent of the transmission shrinkage percentage

10,139 Dth = 10,000 Dth / (1 - .0137)

For distribution-level end-use customers:

Receipt Point Quantity = Estimated Metered Usage x (1 + y) / (1 - x)

where x equals the decimal equivalent of the transmission shrinkage percentage
where y equals the decimal equivalent of the distribution shrinkage percentage

10,156 = 10,000Dth x (1 + .0016) / (1 - .0137)

assuming a noncore distribution-level customer
Always round to the next highest integer. For example, round 10,155.13 up to 10,156.

If you have questions concerning these new shrinkage rates, please contact your CGT Account Services Representative.

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