Advertisement
YOU ARE HERE: LAT HomeCollections

DWP Purchases Natural Gas Reserves

June 30, 2005|Patrick McGreevy | Times Staff Writer

The Los Angeles Department of Water and Power has led a group of cities in buying natural gas reserves in Wyoming for $300 million to help ensure a stable supply for its power plants, officials announced Wednesday.

The DWP signed a purchase agreement with Anschutz Pinedale Corp. in Denver to buy a portion of the company's natural gas reserves in Sublette County, officials said.

The agency said the acquisition, believed to be the largest natural gas field owned by public power utilities, will help stabilize the "single most volatile component" of the DWP's operating expenses. DWP's partner in the purchase is the Southern California Public Power Authority, representing Anaheim, Colton, Glendale, Burbank and Pasadena.

Not everyone is comfortable with the purchase. Los Angeles City Councilwoman Janice Hahn voiced concern that the city has not been in the business of owning a gas field before and that the market could make the purchase a bad decision.

"It's a risky venture," she said. "You are basically banking on the price of gas going up" to justify the purchase.

But DWP General Manager Ronald Deaton said that if the price of natural gas goes up, the purchase will provide cities with substantial savings.

Hahn was also concerned that the council would not get an automatic veto power over any future operating agreements that result from the purchase.

The agreement gives the DWP 74.5% ownership in the acquisition, which includes 38 operating oil and gas wells and is expected to yield about 112 billion cubic feet of natural gas over the life of the field.

Advertisement
Los Angeles Times Articles
|
|
|