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In the past 2 years innovative changes in rate structure for customers of California's utilities have led to significant changes in demand and end uses of natural gas in the state. Passage of the Miller-Warren Lifeline Act in 1975 has led to subsidies to residential users that have been balanced by inversion of rate schedules for large users and higher rates to interruptible industrial customers. Fuel switching from natural gas to other fuels, principally oil, has been extensive in the last few years owing to the depressed prices associated with No. 6 and No. 2 fuel oil on the West Coast. Because 87% of California gas is imported from Canada and the southwest on all-year contracts, summer surpluses are materializing. A benign 1977-78 winter, together with loss of summer i dustrial customers has led to load management problems which were solved by increased use of natural gas for electrical generation in 1977 and 1978.
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