6. The Long Beach Agreement

SoCalGas/SDG&E and Long Beach jointly presented a proposal for giving wholesale customers of SoCalGas an option to purchase gas from the consolidated SoCalGas/SDG&E gas portfolio. This proposal provides the wholesale customers with treatment comparable to that which SDG&E will receive. It treats core customers of the wholesale customers as if they were SoCalGas/SDG&E core customers and noncore customers of the wholesale customers as if they were SoCalGas/SDG&E noncore customers.

ORA objects to only one aspect of the proposal. The proposal provides that the wholesale customer would be charged the cross-over rate for 12 months with respect to the load of any eligible noncore customer of the wholesale customer that elected bundled service from the wholesale customer after January 1, 2001. ORA proposes, instead, that SoCalGas charge the cross-over rate for 12 months for all eligible noncore load of the wholesale customer, even if that load was getting procurement service from the wholesale customer prior to January 1, 2001.

Under the SoCalGas/SDG&E proposal for their retail noncore customers who were already receiving core subscription service from SoCalGas or SDG&E before January 1, 2001, those customers would be allowed to switch to bundled core transportation and procurement service without paying the cross-over rate. The proposal they have made for the load of eligible noncore customers of wholesale customers who were already receiving procurement service from the wholesale customer before January 1, 2001, is that those customers not pay the cross-over rate. In our opinion the utilities' proposal provides more consistency in treatment of noncore customers in the various service territories than does ORA's proposal. There is no need for a cross-over rate for those customers.