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Sempra Pushes ESPs in Customer Choice Campaign

Sempra Pushes ESPs in Customer Choice Campaign

Anticipating that its joint settlement will be approved by state regulators by this fall, Sempra Energy's utility subsidiaries are pushing a new "Customer Choice" campaign designed to increase the natural gas volumes residential and small business customers buy from energy service providers (ESPs). Sempra is stressing to its utility employees that the increased ESP business cannot be achieved without "major opening up" of the gas markets in the state.

Southern California Gas and San Diego Gas & Electric, the two Sempra-owned utilities, are portraying their joint settlement as including more than 30 parties and as being "a major step in achieving (the) vision of transforming retail markets." Among the stakeholders signing onto the proposed settlement are large end-users, marketers, producers, suppliers, utilities, merchant storage operators, state regulators and the CPUC's independent Office of Ratepayer Advocates (ORA).

In communications to utility employees last month, a SoCalGas customer services/marketing vice president, Rick Morrow, said Sempra's California Public Utilities Commission (CPUC)-regulated utilities are "trying to promote more customer choice in a manner that enhances the benefits of electric restructuring, enables competition and provides innovative solutions for customers."

Morrow and other Sempra officials hold out more business for the ESPs and savings for end-use customers while acknowledging that the proposed deal with various pipelines, shippers, marketers and large end-users impacts mostly "upstream" points on the SoCalGas transmission pipeline system, as opposed to the linkages closer to the end-use customers.

The proposed settlement, which Sempra expects the CPUC to rule on this fall, changes gas operations in four basic areas: (1) core interstate transmission --- ESPs would be able to buy interstate transmission at market --- rather than assigned --- rates; S(2) intrastate transmission --- ESPs and large (noncore) end-use customers will have the option of buying firm transmission rights, along with new options for buying and trading firm rights; (3) storage --- ESPs can choose how much they want from SoCalGas or another provider, aside from basic amounts of SoCal storage that must remain held to assure core reliability; (4) balancing --- self-balancing will be an option, with credits given for avoided utility costs.

Other changes in the agreement remove existing limitations to the aggregation programs among residential and small business (core) customers; provide credits for ESPs who do their own billing; and eliminate so-called "core subscription" services for large customers not wanting to buy their own supplies. For those customers, the settlement would require they pay the full rate of being a core customer, depending on the utility to buy their supplies as well as transport them.

While the proposed settlement is pending at the CPUC, SoCalGas has set up a cadre of its marketing employees to encourage hospitals, colleges, government sites and other large, core customers to switch to ESPs since these large customers provide the most lucrative potential for the nonutility energy suppliers.

"The settlement agreement helps meet the CPUC's objectives of restructuring the gas industry," Morrow was quoted in an employee newsletter. "Our filing addresses all of the CPUC's most promising options for creating a competitive marketplace."

Richard Nemec, Los Angeles

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