| Status: The State allows residential
customers to purchase natural gas from marketers through a “core
aggregation transportation program” offered by the local distribution
companies (LDCs). |
| Overview: California has had a customer
choice program for all residential and small commercial customers
(referred to as core customers) since 1995 through its core aggregation
transportation program (CAT). The program allows core customers to
purchase gas from marketers who have met minimum aggregation levels of
120,000 therms per year. The group that satisfies at least 120,000 therms per year can be made up of any combination of core customers and does not need to be linked by geography or corporate structure. Customers must sign a 1-year agreement to
purchase natural gas from the non-LDC supplier. According to the most recent
Energy Information Administration data, 26,520 residential customers in
California are purchasing gas from marketers, representing about 0.3
percent of deliveries to residential consumers statewide in 2007. About 95 percent of the State's residential and
commercial customers are served by three local distribution companies: San
Diego Gas and Electric Company, Southern California Gas Company, and Pacific Gas
and Electric Company. Although legislation
passed in October 1999 required LDCs to provide bundled service
and be the only providers of billing and metering services, it exempted
existing core aggregation programs and included the provision that
consumers can choose to purchase gas from another supplier. As of December
2008, four marketers are energy service suppliers
for residential customers; however, three of the four serve multifamily residential customers, while only one serves single-family households. Possible reasons for the low interest from marketers in serving the residential market include high transaction costs and the difficulty in offering competitive rates to core customers. |
| EIA State Data: In 2007, California had 10,439,220 residential and 446,120 commercial customers. They consumed approximately 492 and 251 billion cubic feet of natural gas, respectively. The average prices residential and commercial customers paid for natural gas from local distribution companies were $11.57 and $10.20 per thousand cubic feet, respectively. |
| Eligibility and Participation in Retail Choice
Programs: |
Eligibility and Participation by Customer Type, December 2008
|
Customer Type |
2007 Customer Total |
Eligible in 2008 |
Participating in 2008 |
|
Total |
Percent
of 2007 Customer Total |
Total |
Percent
of Eligible |
Percent
of 2007 Customer Total |
|
Residential |
10,439,220 |
10,439,220 |
100 |
26,520 |
0.3 |
0.3 |
|
Commercial |
446,120 |
446,120 |
100 |
24,671 |
5.5 |
5.5 |
|
Total |
10,885,340 |
10,885,340 |
100 |
51,191 |
0.5 |
0.5 |
|
Sources:
2007 Customer Total: Energy
Information Administration, Natural Gas Annual
2007 (January 2009). Eligibility and Participation:
Estimated based on 2007 data reported on Form EIA-176, "Annual
Report of Natural and Supplemental Gas Supply and Disposition,"
which is the primary data source for the Natural Gas Annual
2007. | |
Regulatory and Legislative Actions
on Retail Unbundling
Summary: The California Public
Utilities Commission (PUC) endorsed restructuring in a collaborative
settlement by Pacific Gas and Electric Company (PG&E) and 25 other companies
on August 1, 1997, known as the Gas Accord, which gave all PG&E
customers the option to purchase gas from other suppliers. In January
1998, the PUC opened a docket to investigate the possibility of
restructuring gas markets statewide. After a series of hearings, the PUC
identified the most promising options to consider for further study and
ordered a cost/benefit analysis of these options with the intent of
preparing a report of recommendations for consideration by the State
legislature. Legislation was enacted in August 1998 that prohibited the
PUC from taking any restructuring action before 2000. This legislation was
superseded in October 1999 by Assembly Bill 1421 that mandates bundled
service by utilities and requires them to be the sole providers of billing
and metering services. |
Regulatory and Legislative Actions
|
Legislation |
06/03 |
Proposal To Make CPUC an Elected Board
(SCA 6).
Senate's Constitutional Amendments Committee voted to change CPUC to
seven-member commission elected by district and subject to term
limits of two 4-year stints. Currently CPUC has five
governor-appointed members serving 6-year staggered terms.
Appointments must be approved by the State
Senate. (In 2004, the proposal was left in committee without further action.) |
|
|
10/02 |
Legislation Requiring Energy Policy Report
Every 2 Years (Senate Bill
1389). The Warren-Alquist State Energy Resources Conservation and Development Act requires the California Energy Commission to present an
Integrated Energy Policy Report to the Governor and Legislature
every 2 years based on its assessment of trends in energy
markets. |
|
|
10/99 |
Legislation Mandating Bundled Service by
Utilities (Assembly Bill
1421, Public Utilities Code). Supersedes prior law that prohibited PUC action on
restructuring before 1/1/2000. Mandates that LDCs provide bundled
service and be the only providers of billing and metering services.
However, it exempts existing core aggregation programs and includes
a provision that consumers can choose to purchase gas from another
supplier. |
|
|
08/98 |
Legislation Allowing PUC to Investigate
Restructuring but Limiting Action (Senate Bill
1602 enacted 8/28/98, creating Section 328 of Public Utility Code).
Legislation allows PUC to investigate restructuring but prohibits
any action until 1/1/2000 and disallows any restructuring decisions
made after 7/1/98 affecting core
customers. |
Regulatory
Action |
02/06 |
PUC Submits Natural Gas Study to State Senate Energy, Utilities and Communications Committee. The study responds to questions regarding market structure, ownership, market power, and price and describes the natural gas market, especially as it relates to California. The study is a collaborative effort of the PUC and the Energy Commission. |
|
|
09/03 |
Switching Policy Clarified for Large
Industrials. PUC reaffirmed that industrial electricity
customers cannot switch from non-core to core status unless supplier
goes out of business. |
|
|
05/03 |
Energy Action Plan Approved.
Joint plan with the Consumer Power and
Conservation Financing Authority (CPA) and the Energy Resources
Conservation and Development Commission (CEC). Goal is to implement
a unified State energy policy. Proposes six sets of actions,
including ensuring reliable supply of reasonably priced natural gas,
optimizing energy conservation and resource efficiency, and
upgrading and expanding the electricity transmission and
distribution infrastructure. Includes increasing storage capacity
and continual monitoring of natural gas prices and trends for signs
of market manipulation. |
|
|
01/03 |
PG&E Applies to Extend Gas Accord
Through 2004. Company filed
proposal with PUC that would increase reliability standards and
refine some operational procedures. |
|
|
01/03 |
2003 Work Plan. PUC prepared
2003 work plan for legislature. Includes three primary objectives:
(1) reasonable gas rates, (2) matching capacity to needs, and (3)
maximizing participation in energy efficiency and low-income
programs. |
|