8. Impact of D.01-12-018

On December 11, 2001, the Commission issued D.01-12-018 in I.99-07-003, our investigation into gas regulatory strategy. D.01-12-018 adopted with modifications the Comprehensive Settlement Agreement (CSA) that had been submitted in that proceeding by numerous parties, including SoCalGas and SDG&E. Pursuant to a request for comments on whether D.01-12-018 affected any of the issues raised in this application, SoCalGas and SDG&E filed joint comments and SCGC filed comments.

The utilities say that the adoption of D.01-12-018 has some impacts on this application. D.01-12-018 provides that SoCalGas and SDG&E should no longer offer gas procurement service to noncore customers. Thus, terms and conditions of gas procurement service for noncore customers need not be adopted. Also D.01-12-018 lifted the prohibition on SoCalGas' noncore customers transferring to core service, but did not address any terms and conditions for such transfers. The CSA provides for contracts for utility procurement service to noncore customers already in existence to run to their conclusion, at which time the noncore customer could no longer take procurement service from the utility. Noncore customers in this category who fail to designate a marketer would be transferred to bundled core transportation and procurement service. We have considered in this application the terms and conditions for such transfers by both SoCalGas and SDG&E noncore customers. In regard to the transfer of a noncore customer to core status, D.01-12-018 stated:

We note that G-3304 suspended transfers to core subscription service and core service as of December 20, 2000. As discussed above, it is our intention to provide customers with the option of choosing between noncore status, with its attendant responsibilities, and the bundled core. In order to provide this option, this decision rescinds that portion of Resolution G-3304 which suspended transfers to bundled core service, as of the effective date of this decision. (mimeo., p. 90.)

SoCalGas Advice Letter 3100 filed on December 26, 2001, lifted the moratorium adopted in G-3304 on SoCalGas noncore customers transferring to core status.

In this application, SoCalGas and SDG&E proposed terms and conditions under which their noncore customers could elect to transfer to core status. They proposed that there be a limitation on which noncore customers could elect core status, excluding electric generation (EG), enhanced oil recovery (EOR) and refinery noncore customers from eligibility for this transfer. SoCalGas and SDG&E also proposed other restrictions discussed above in Section 3.

SCGC argues that because D.01-12-018 lifted the ban on noncore to core transfers, all noncore customers currently have the option of continuing with noncore service or transferring to bundled core service, contrary to what SoCalGas proposes. Rather than permitting noncore customers to have the option to transfer to core service, SoCalGas proposes to restrict the right to transfer to core service so as to prevent transfers by electric generation, refinery, and enhanced oil recovery customers who consume over 250,000 therms per year. SCGC says SoCalGas' proposal to restrict the opportunity for certain noncore customers to transfer from noncore to bundled core service flatly contradicts D.01-12-018. That decision grants to all noncore customers an option to transfer to bundled core service without restriction. Accordingly, SoCalGas' proposal to continue a prohibition on noncore to core transfers by electric generation, refinery, and enhanced oil recovery customers should be dismissed as an issue in this proceeding.

SCGC asserts that the SoCalGas/SDG&E proposal to combine core portfolios violates D.01-12-018 and should be dismissed as an issue. It argues that the utilities do not have the requisite capacity to serve the combined portfolio, and it would be speculative to assume that they would be able to get the capacity under the terms of the CSA. Given that we decline to combine the SoCalGas and SDG&E core portfolios, the question of whether consolidation is prohibited by D.01-12-018, is moot.