At a recent en banc hearing addressing proposed rule! forcapacity brokeringin California, CPUCPresidentPatrici:
Ecken described capacity brokering as the "last step" in the CPUC's effort to create a more competitive gas regulatoq environment in California. President Eckert's assessmeni reveals a misconception that capacity brokering alone wi U solve existing inequities that prevent dynamic competition in the California gas market. Although the CPUC's recently adopted capacitybrokering rules represent a major milestone in achieving a more open and accessible market in the State, capacity brokering is only a first step along the road toward a truly competitive gas marketplace.
For the capacity-brokering program to be effective in California, it must be accompanied by a more general disaggregation of LDC costs and services, as well as a reallocation of costs among customer groups in accordance with the benefits conferred. Consistent with the direction of the FERC's Mega-NOPR, the CPUC must be prepared to allow marketers and suppliers to compete with the LDCs for sales of packages of services to end-use customers.
As new interstate pipeline capacity is constructed and customers' supply options broaden, the brokering of firm capacity may become less crucial to achievingcompetition, whereas unbundled, repackaged service alternatives become increasingly important to customers and suppliers alike. Rather than remain content with capacity-brokering rules that provide a pecking order in a capacity-constrained environment. the CPUC must look ahead to when costallocation and rate-design policies will determine the competitiveness of the California gas marketplace.
Transition to Capacity Brokering
Since the implementation of California's new gas regulatory structure in 1988. there has been widespread dissatisfaction over the terms and conditions under which marketers and suppliers are able (orunable) to compete with the LDCs for sales to noncore (large Commercial and industrial alternate-fuel-capable) Customers. Responding to complaints from all segments of the market, the CPUC recog-John W. Lcslie b an attorney with the Son Diego law firm of Luce, Forward, Hamilton & Scripps.
NATURAL GA~JANUARY 1992
CoPyrigh~ 0 1992 by Executive Enterprises