I. The Southern California Gas Company Distribution Problem

With the deregulation of the California Natural Gas Industry in 1988, California gas utilities face new market pressures to remain a competitive energy source. While the gas utilities' core customers - primarily residential and commercial customers - continue to require reliable low cost service, many large customers are demanding alternatives to the traditional gas procurement service of the utilities. To aid decision makers in this newly competitive market, accurate plans for economically efficient supply purchases and storage operations which meet market demand are essential. At Southern California Gas Company (SoCalGas), which is the largest distributor of natural gas in the Nation serving over 4 million customers, the Gas Balance model was developed to provide the necessary planning assistance. This model has a Mixed Integer Programming (MIP) formulation which is critical to the model's ability to project economically efficient gas operations.

11. The Gas Balance Model Problem

The SoCalGas gas distribution problem is to determine a least cost mix of supply purchases, distribution alternatives, and storage operations to meet system demand. Constraints imposed on the supply and storage operations, in addition to demand requirements and supply availabilities, are the physical limitations of the transmission and storage system. Regulatory and policy guidelines which prescribe the treatment of customers and suppliers also impose significant constraints. billion in 1988, even a small percentage saving implies a major impact on the company's performance as a business. With an estimated total gas purchase bill of $2.07 Transmission Network SoCalGas' service area includes nearly all of southern and central California and comprises a total of 42,279 miles of gas main. Balance model network represents the volumetric capacities of SoCalGas' transmission and storage system. The transmission system spans the SoCalGas service territory and is augmented by six gas storage facilities. volumetric flows. Network arc flow costs and retention factors represent the cost and fuel consumption associated with several large compressor stations located on the transmission system. The Gas The network constraints are in average daily Gas Storage A key feature of the SoCalGas distribution system is the availability of six gas storage fields which can be used to help accommodate daily and seasonal fluctuations in system demand. The storage fields have a total operating capacity of approximately 110 billion cubic feet. The upper and lower operating capacity of each storage field is represented in the model by upper and lower bounds on period ending storage inventory. With one exception, bounds on maximum injection and withdrawal rates as a function of storage inventory levels are described by convex maximum injection and withdrawal rate curves. The convex curves are represented in the model by piecewise linear approximations. The exception is the largest storage field, Aliso Canyon, which has an operating capacity of 70 billion cubic feet (Bcf). The maximum injection curve for Aliso Canyon has a discrete jump when inventory levels are within the range of 38 Bcf.

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