Retail Gas Competition Shows Some Signs of Life in CA
Retail gas competition is starting to pick up speed in
California despite continued consumer apathy, according to a survey
of the state's three gas distribution utilities released last week.
Pacific Gas & Electric (PG&E) now has 16 marketers
aggregating loads; two years ago, it had only four. Southern
California Gas (SoCalGas) has 12 aggregators now, compared to about
a half-dozen a year ago; and San Diego Gas and Electric (SDG&E)
reports six current aggregators. On the Internet, SoCalGas reports
that the joint Energy Marketplace website that it operates with
PG&E currently has seven marketers involved in northern
California and six in the southern half of the state.
Despite the growth in the number of marketers and aggregators,
however, PG&E is experiencing the only meaningful expansion of
actual aggregation, and the vast bulk of the growth is limited to
small business customers, with little or no growth among
PG&E reported growth of 17% and 11% for the total meters and
gas volumes, respectively, covered by competing suppliers over the
past year. And over the past two years those same categories have
increased 44% and 37%, respectively.
Overall, the three investor-owned gas utilities currently have
about 22,000 meters (accounts) participating in gas aggregation,
representing a total annual load of about 33 to 34 Bcf. SDG&E
has experienced a small increase in the total volume of gas, but a
1% drop in the number of meters (1,006) in the program. SoCalGas
has remained about the same with more than 10,000 meters and 17 Bcf
of core supplies involved in aggregation, representing about 5% of
its total core throughput.
Jerry Miller, PG&E's director of gas industry restructuring,
is optimistic the volumes will increase once aggregators and
marketers make a concerted effort to ramp up volumes. Most
participants are still getting their internal operating structures
in place to compete in both electricity and natural gas aggregation
longer term. Except for two firms, Miller said, for the most part
the marketers are maintaining separate staffs for power and gas
aggregation and going after separate customers.
"There is some crossover, but not a lot yet," Miller said. "Many
players are just trying to get their feet wet with core markets to
understand longer term what it is going to take to succeed in those
markets. They don't have a lot of experience in the core markets
yet. But down the line, they will do both [power and gas] to the
As a means of stimulating more customer and marketer interest,
SoCalGas earlier this month started completing direct access
requests electronically, switching customers from utility gas
buying services to an aggregator through use of the Internet
"Marketplace" website. The move makes it easier and less costly for
aggregators to switch customers because all they need to do it is
have Net access.
Richard Nemec, Los Angeles