State regulators decided Tuesday to let Southern California Gas cut its prices to retain two big customers that had been threatening to start using oil instead of natural gas.
But a third large customer, San Diego Gas & Electric, said it has already switched to a source of cheap oil and quit buying gas. The San Diego utility normally buys its natural gas from Southern California Gas and said it accounted for 10% of the Los Angeles-based utility's load.
The scramble among California utilities for the cheapest sources of energy was touched off by the collapse in world oil prices that began in December. That is driving down other prices and is expected to result in lower gas and electric bills generally.
As a result of Tuesday's emergency action by the Public Utilities Commission, Southern California Gas can cut the rates it charges to two customers that jointly account for 25% of its business: Southern California Edison and the Los Angeles Department of Water and Power.