5. Core Aggregation Transportation (CAT)

Under existing rules, any core customer switching from CAT marketer procurement service to utility procurement service pays the regular core procurement rate for such service, but must return to utility procurement service for a minimum of 12 months. The one exception is that the customer may switch to a different CAT marketer within 90 days of returning to utility procurement service. This exception can lead to gaming of the market place.

The greatest risk of gaming involves larger core customers. In order to prevent such gaming, SoCalGas and SDG&E propose new rules for core customers with annual consumption over 50,000 therms who want to switch from a CAT marketer to utility procurement service. The utilities propose that these customers should be required to pay the cross-over rate as described above for the first 12 months of utility procurement service. Should the Commission decide to give exemptions to customers whose marketer withdraws from California, then a core customer of the marketer consuming over 50,000 therms per year who returns to utility procurement service would not have to pay the cross-over rate. Such a customer would have 90 days to find a different CAT marketer or be committed to utility procurement service for a full 12 months. However, if the customer chose a different CAT marketer within 90 days, the customer would be charged the cross-over rate for the procurement service it received from the utility within those 90 days.

SoCalGas and SDG&E believe the potential for abuse by core customers under 50,000 therms is small enough due to transaction cost barriers that no change in the current CAT rules applicable to them is necessary. There is no objection to the utilities' proposal; it is reasonable as applied to each utility, and will be adopted.