Sempra Promotes CA Unbundling Restrictions in Other States
A new California law restricting future natural gas unbundling
fits the "vision" of $5-billion utility holding company San
Diego-based Sempra Energy said, and it intends to "actively
promote" similar restrictions in other states in which it operates.
The parent of two multi-billion-dollar utilities, Southern
California Gas and San Diego Gas and Electric, Sempra has new or
existing utility operations under way or proposed in North
Carolina, Maine and several other states. "The new law represents
a thoughtful treatment of issues of customer choice and safety,"
said Tom Brill, Sempra's director of regulatory policy, quoted in a
company newsletter for employees and stakeholders. "The new law
preserves both customer safety and customer choice in determining
how the California Public Utilities Commission unbundles the costs
of natural gas utilities." Sempra, and other advocates for the new
laws-notably other utilities and the gas utility worker
unions-contend that both utilities and nonutilities alike are free
to "offer products and services with the goal of becoming the
preferred providers in the restructured energy industry."
Critics argue that the new law (AB 1421) is aimed at keeping gas
services mostly bundled for the smallest, mass market retail
customers. It was squeezed out of a late night session of the
lawmakers just before the last Labor Day weekend, ensuring that the
utilities will remain the almost exclusive gas provider for small
customers. Observers think the new law is basically consistent
with actions earlier in the summer by the California Public
Utilities Commission that are now being worked out in settlement
discussions among the state's major gas industry participants.
Those talks, which will resume Nov. 17, focus on the SoCalGas and
Pacific Gas and Electric transmission and storage systems, mostly
as they relate to large commercial and industrial customers and
core aggregators. The new law (AB 1421) is mainly concerned with
core customers and the utilities remaining the gas merchant for
"We supported the (new law)," said a PG&E utility
spokesperson. "A key element for us is that (it) provides that (we)
shall continue to provide services to core customers (revenue cycle
and after-meter services). There are obvious safety considerations
in those services, and we wanted to be able to continue to provide
them to our core customers."
"AB 1421 upholds customer safety by preventing unbundling of the
utility's costs for 'after-meter services', including leak
investigation, inspecting customers piping and appliances, carbon
monoxide investigation, pilot relighting and high-bill
investigation," according to Sempra Energy's newsletter report. It
also preserves the gas utilities' monopoly role in providing
transmission, storage-for-reliability and distribution for
residential and small business ("core") customers. Sempra opens
the newsletter report by stating categorically that it hopes other
states will follow California's approach.
The new law is designed to ensure that the state's major
investor-owned gas utilities continue to provide bundled service
for core customers, except those aggregating their loads under the
state's eight-year-old program, for which the rules have been
relaxed in recent years to allow any residential or small business
customer to participate. So far, less than 10% of the customers
have participated. However, even for those who choose an
alternative, the law lessens the credit customers can receive from
the utility and prohibits the after-meter services.
Richard Nemec, Los Angeles
©Copyright 1999 Intelligence Press, Inc. All rights
reserved. The preceding news report may not be republished or
redistributed in whole or in part without prior written consent of
Intelligence Press, Inc.