Calif. PUC Draft Would Exclude Billing, Collection Costs from PG&E Core Brokerage Fee

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November 16, 2010

The California PUC has issued a proposed decision which would adopt a core brokerage fee $0.025 per decatherm at Pacific Gas & Electric, effective January 1, 2011 through June 30, 2013 (A. 09-05-026).

In the draft order, the PUC would reject arguments from competitive providers and customers to include billing and collection costs, as well as other costs, in the core brokerage fee.  "[I]t is clear from the discussion above that the core brokerage fee is made up of costs related to the procurement or purchasing of gas, and that billing and collection costs are part of the transportation rate and cannot be unbundled into the core brokerage fee," the draft finds.

PG&E had sought a core brokerage fee of $0.0188 per Dth, while competitive providers and customers had sought a fee of $0.1347 per Dth.  The current core brokerage fee is $0.032 per Dth.

While denying the inclusion of billing and collection costs in the core brokerage fee, the draft does find that, "an appropriate balance must be reached in setting the core brokerage fee."

"If the core brokerage fee is set too low, this will act as a deterrent for customers to switch to a competing gas supplier.  If the core brokerage fee is set too high, this will encourage gas customers to switch to a competing gas supplier," the draft states.

"[T]o encourage the continuing growth of competition between PG&E and competing gas suppliers, we will adopt a core brokerage fee of $0.025 per Dth. This amount is about mid-way between PG&E's recommended core brokerage fee, and the current core brokerage fee level of $0.032 per Dth, which has resulted in a steady growth of gas customers taking service from competing gas suppliers.  The adoption of a core brokerage fee of $0.025 per Dth is reasonable, and will help maintain a competitive playing field for gas customers considering taking gas from a competing gas supplier," the draft states.

   
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