California regulators this week are slated to take a criticalstep in eventually opening the natural gas industry to morecompetition when they decide whether to follow staffrecommendations and push for a natural gas consumer protection lawwhen the state legislature reconvenes next month. Staff at theCalifornia Public Utilities Commission are asking the five-memberregulatory body to adopt a proposed consumer protection bill. Thisis in response to the state legislature, which has openly expressedconcerns about unbundling natural gas to the same degree as thestate’s electric industry because of customer and public safetyissues related to the distribution and use of gas.
The CPUC report outlines the types of consumer protectionstandards that are needed before any steps are taken to create amore competitive natural gas market in California. (A two-year-oldregulatory proceeding examining further gas unbundling is currentlymired in protracted settlement negotiations among the state’s 75 ormore gas industry stakeholders.)
As a result, the regulator’s staff has suggested a law withsimilar language to one passed in 1997 to provide consumerprotections just before the start of electric industryrestructuring, including the certification of nonutility gasservice providers (GSPs).
“It does not conflict with the directives provided by thelegislature,” said Kent Kauss, the CPUC’s Sacramento lobbyist. “Thelegislature has already indicated that gas needs more safeguardsand must provide a default provider (utility service) choice forconsumers. Safety and the essential utility service issues are abigger concern for the legislature when it comes to natural gas.”
The key parts of the CPUC legislative proposal include GSPregistration/certification requirements, information disclosurerequirements, independent verification of a customer’s intent tochange providers, complaint resolutions when GSPs are involved, andcustomer education.
The current limits on the level of overall participation in thestate’s eight-year-old aggregation program for residential andsmall commercial customers will remain until the law is passed andthe safeguards put in place because the state lawmakers areconcerned about consumers being hit with “unfair and abusivemarketing practices” by nonutility GSPs.
In its report last summer, the CPUC urged the legislature toact, giving the regulators the authority to adopt additionalconsumer protections. “With such changes in place,” the reportstated, “we feel it would be appropriate to lift the limits on thecore aggregation transportation programs.”
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