PUC Issues Guidelines for Gas Deregulation

With the deregulation of the state’s electricity industry moving ahead, the California Public Utilities Commission took its first official steps Thursday toward a similar restructuring of the natural gas market, issuing proposed market and consumer protection guidelines.

The PUC’s aim is to open the retail natural gas market serving households and small businesses to competition as a way to lower prices, but still protect consumers from fraud and unsafe operators and maintain supply reliability. The natural gas market already is partly deregulated: The pipeline business was opened more than a decade ago, and most large customers now buy gas from competing non-utility providers.

On Thursday, the PUC ordered Los Angeles-based Southern California Gas and other natural gas utilities to begin the task of separating the costs of various rates and services, including things such as metering, billing and even relighting a heater’s pilot light. The idea is that new companies could compete to offer those various services separately.

The commission also directed its Energy Division to develop a detailed consumer protection program in the next 30 days.

A PUC staff report issued last January explored options for “unbundling” various retail services and markets that now are controlled by a few utilities, including Southern California Gas, San Diego Gas & Electric and Pacific Gas & Electric.

Utility unions oppose the latest deregulation effort, contending that customers would pay more, safety would be jeopardized and utility workers would lose their jobs. The unions say, for example, that homeowners might be tempted to light their own pilot lights and avoid appliance inspections if they were charged for these services.

Public hearings on restructuring issues will be held in the fall.