CPUC Finds 10 Areas Requiring More Gas Restructuring
California energy regulators yesterday identified 10 items for
potential natural gas industry restructuring, most of which deal
with wholesale or large customer operations. State regulators also
encouraged utilities and large customers to cease their bickering
and come up with a broad-based settlement on gas unbundling.
In the meantime, the California Public Utilities Commission will
conduct a separate proceeding to analyze the cost-benefits of each
of the 10 areas noted. "The [CPUC decision] is seeking to develop a
structure that preserves the utilities' traditional role of
providing full service to core customers while clearing obstacles
to the competitive offering of gas [supply], transmission, storage,
balancing and other services for all customers throughout the
state," the CPUC said in its news announcement on its action.
Half of the areas outlined by the regulators deal with attempts
to bring more transparency and consistency into wholesale gas
operations, such as improving statewide access to
transmission/storage services, trading of transmission, storage and
balancing rights, balancing service, hub services, and improving
the flow of information related to market transactions.
Regarding the latter, the CPUC indicated in taking its action
that it will determine the adequacy of current information gas
utilities provide to customers and competitors alike. For all
customers, the CPUC calls for separate costs and rates being
delineated for all gas utility services in the state as one of the
10 areas specified for potential unbundling.
Of additional interest to the smallest (residential and
business) customers, the CPUC identified the need to "refine"
utility gas buying and "expand competitive options" for the captive
core customers, the smallest ones which tend to rely on the
utilities for all of their needs.
Metering and billing options are two other areas of specific
focus on the mass residential and small business customers.
While pushing parties to settle the issues and bring that
proposal to the regulators, if a settlement is not reached
relatively quickly, the CPUC said it is prepared to hold hearings
this fall to examine the cost-benefit aspects of increasing
unbundling in the 10 areas identified. The regulators also cited
previously established goals for gas unbundling as criteria with
which to test each of the proposed areas. Those specify that any
further gas unbundling should do the following: Complement and
enhance benefits of electric restructuring; eliminate inappropriate
cross-subsidies; eliminate and prevent barriers to competitors'
entry into the California gas market, mitigate competitive abuses
from one firm having market power; enhance competition by providing
separate rates for each major component of utility service and
allow customers to choose other firms to provide those services;
ensure rates customers pay reflect the cost of the services they
are receiving; preserve current low costs; provide adequate
consumer protection; and ensure natural gas safety and reliability.
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