The purpose of this filing is to seek approval to implement a one-year pilot program providing for payment of bills by credit card or debit card.

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1 Lee Schavrien Director Regulatory Case Management and Tariff Administration 101 Ash Street San Diego, CA October 10, 2000 Tel: Pager: Fax: Public Utilities Commission of the State of California Subject: Credit/Debit Card Payment Options Pilot Southern California Gas Company (SoCalGas) hereby submits for filing with the Public Utilities Commission (Commission) this request for approval to offer an additional payment option for SoCalGas core customers. Purpose The purpose of this filing is to seek approval to implement a one-year pilot program providing for payment of bills by credit card or debit card. Summary of Facts SoCalGas proposes to implement a one-year pilot program in which core customers will be given the additional option of paying their gas bills by telephone using an authorized credit card or debit card. Credit and debit card payments will be made available through a duly authorized independent service provider; a transaction fee for these services over and above the Utility bill amount will be charged to the customer by the independent service provider. This proposal complies with SoCalGas Tariff Rule No. 12, Payment of Bills, which states that, Payment shall be made at the office of the Utility or, at the Utility s option, to duly authorized collectors of the Utility. (Tariff Rule No. 12, paragraph A, emphasis added). SoCalGas has appended a copy of Tariff Rule No. 12 to this advice letter, as Attachment B. Approximately ten months after the start of the pilot program for credit and debit card payments, SoCalGas will provide the Commission with a report assessing the value and effectiveness of these payment options. If appropriate, SoCalGas will file another advice letter seeking approval to make these payment options available to customers on a permanent basis. SoCalGas believes payment by credit and debit cards provides a particularly useful tool for customers to manage winter bills, which SoCalGas anticipates to be higher this winter than in previous years. Consequently, SoCalGas intends to launch this pilot program by January 19, 2001, to address customer needs.

2 - 2 - October 10, 2000 SoCalGas has appended a description of consumer protection measures and sample informational material associated with the proposed pilot program as Attachments C and D to this advice letter, respectively. This filing will not affect any other rate or charge, cause the withdrawal of service, nor conflict with any other rate or schedule. Protests Anyone may protest this advice letter to the California Public Utilities Commission. The protest must state the grounds upon which it is based, including such items as financial and service impact, and should be submitted expeditiously. The protest must be made in writing and received within 20 days of the date this supplemental advice letter was filed with the Commission. There is no restriction on who may file a protest. The address for mailing or delivering a protest to the Commission is: IMC Branch Program Manager Energy Division California Public Utilities Commission 505 Van Ness Avenue, Room 4002 San Francisco, CA A copy should also be mailed to the attention of the Energy Division-IMC Branch, Room 4005 (at the address shown above). It is also requested that a copy of the protest be sent via electronic mail and facsimile to SoCalGas (at the addresses shown below) on the same date it is mailed or delivered to the Commission. Attn: Steve Pangarliotas, ML 28A4 Energy Distribution Services - Mass Markets Southern California Gas Company 555 West Fifth Street Los Angeles, California Facsimile No. (213) spangarliotas@socalgas.com Attn: Sid Newsom Regulatory Tariff Administration - GT14D6 555 West Fifth Street Los Angeles, CA Facsimile No. (213) snewsom@sempra.com Attn: C. Richard Swanson Regulatory Tariff Manager - HQ14C 101 Ash Street San Diego, CA Facsimile No. (619) rswanson@sempra.com

3 - 3 - October 10, 2000 Requested Effective Date This filing will not result in an increase in any rate or charge, conflict with other schedules or rules, or cause the withdrawal of service or result in more restrictive conditions of service. Therefore, SoCalGas believes that no resolution is required for this filing. SoCalGas respectfully requests that this filing become effective January 19, 2001, which is more than forty (40) days regular statutory notice. Notice In accordance with Section III.G of General Order No. 96-A, a copy of this advice letter is being sent to the parties shown on Attachment A. LEE SCHAVRIEN Director -- Regulatory Case Management and Tariff Administration Attachments

4 ATTACHMENT A General Order 96-A Distribution List Burbank Public Service Department California Manufacturers Association City of Anaheim Public Utilities Department City of Azusa Light and Power Department City of Banning Municipal Utilities City of Lompoc City of Los Angeles City of Riverside, Public Utilities Department City of Vernon, Director, Water & Power Department Colton Bureau of Light & Water General Services Administration, San Francisco General Services Administration, Washington D.C. Glendale Public Service Department Imperial Irrigation District Long Beach Gas Department Los Angeles Department of Water and Power March Air Force Base Naval Facilities Engineering Command, Western Division Pacific Gas and Electric Company Pasadena Water and Power Department San Diego Gas & Electric Company Southern California Edison Company Southwest Gas Corporation The Utility Reform Network Vandenberg Air Force Base

5 ATTACHMENT B Rule No. 12 PAYMENT OF BILLS (see attached)

6 SOUTHERN CALIFORNIA GAS COMPANY Revised LOS ANGELES, CALIFORNIA CANCELING Revised Rule No. 12 PAYMENT OF BILLS CAL. P.U.C. SHEET NO. CAL. P.U.C. SHEET NO G* G Sheet 1 of 1 A. Bills for gas service will be based upon the measured quantity of gas delivered to the customer, except as provided in Rule No. 14(e), and as noted in Section D. below. Such bills will be rendered at regular intervals and are due and payable upon presentation. Payment shall be made at the office of the Utility or, at the Utility's option, to duly authorized collectors of the Utility. B. Removal bills, special bills, bills rendered on vacation of premises, or bills rendered to persons discontinuing the service shall be paid on presentation. Bills for connection or reconnection of service and payments for deposits or for reinstatement of deposits as required under rules of the Utility shall be paid before service will be connected or reconnected. C. The Utility may demand and collect a $7.50 fee when a customer's payment is returned unpaid by the bank. D. LevelPay Payment Option This Payment Option (formerly known as Level Pay Plan) is available to customers, subject to the following conditions: 1. Eligible customers include the following facilities: a. Residential meter that is individually metered; b. Residential master-meter, excluding submetering facilities, that use less than 3,000 therms per year; and c. Core commercial and core industrial meters that use less than 3,000 therms per year. 2. Eligibility requirements include: a. Customer has no outstanding arrears on their account at the time their Plan starts, or agrees to amoritize the arrears amount. b. In the event that a customer has been involuntarily removed from LevelPay for non-payment, customer has made payment of all past due amounts. 3. Participation is subject to approval by the Utility. 4. Eligible customers may join in any month. 5. Participating customer may voluntarily withdraw from the program. 6. For customers participating in this payment option, a. Anticipated bills for a twelve-month period will be apportioned among twelve months, regardless of the actual consumption during that month; b. Customer accounts are periodically reviewed and adjusted as appropriate; c. The twelfth billing will be the settlement month, at which time bills for actual use will be balanced against the amounts billed; an d d. Any over- or under- billings will be resolved on the settlement month. T T N N T T (TO BE INSERTED BY UTILITY) ADVICE LETTER NO. DECISION NO ISSUED BY Paul J. Cardenas VICE PRESIDENT CHIEF REGULATORY OFFICER (TO BE INSERTED BY CAL. P.U.C.) DATE FILED EFFECTIVE RESOLUTION NO. JUN 11,1997 JUN 11,1997

7 ATTACHMENT C Consumer Protection Measures Selection of a Credit/Debit Card Service Provider: SoCalGas has issued a Request for Proposal from a number of independent service providers. SoCalGas will select, for this pilot program, the service provider whose proposal indicates the best balance of experience, low transaction fee, financial strength, ease of implementation, customer satisfaction, and consumer protection measures. SoCalGas will require, through a written agreement, the authorized card payment facilitator to employ stringent consumer protections. These protections will ensure that consumers are well informed about the service they are using, protected from cramming and other forms of fraud, have adequate access to customer service support, and can be secure in the knowledge that their customer information is being kept strictly confidential. Eliminating Customer Confusion: To eliminate customer confusion regarding card payments, SoCalGas will require the service provider to disclose all relevant terms of service to potential customers. First, when customers call the service provider s toll-free number, they will immediately be informed that they have reached an independent service provider that is authorized by SoCalGas to accept gas bill payments by credit and debit cards. Next, customers will be advised that there is a transaction fee charged by the service provider for card payments and the amount of the transaction fee (the current range for credit card payments is $3.00 to $6.00; the current range for debit card payments is $1.50 to $3.00). At this point, the customer can choose to terminate or proceed with the transaction. Should the customer choose to proceed by inputting card information and desired payment amount, a second advisory will provide the specific transaction fee associated with making a card payment. And, again, the customer can choose to either terminate or authorize payment. By incorporating this type of redundancy, customers will have a clear understanding of these options and their responsibility should they elect to make a card payment. To prevent cramming, the service provider will not be permitted to place any charges on SoCalGas bills. In fact, the service provider will only be able to charge customers its stated transaction fee, which will appear on the customer s bank or credit card statement not the SoCalGas bill -- as a separate and distinct line item next to the vendor s name (e.g., ABC Payments $x.xx).

8 Protections Against Use of Lost or Stolen Cards: Equally important will be various transaction screening safeguards employed by the service provider to mitigate the possibility of unauthorized card use, such as use of a lost or stolen card, or use of a credit card number from a receipt imprint. Before a transaction can be completed, the credit or debit card will go through several steps of real-time authentication and verification. If the service provider s system determines that the card being used was reported lost or stolen, the transaction will be terminated immediately. Further, credit card transactions will not be completed unless the customer inputs either one, or several, of the following: the correct ZIP code associated with the card billing address, the expiration date of the card, and the 3-digit number found only on the back of the card. Similarly, debit card transactions cannot be completed unless the customer inputs the correct PIN or 3-digit number found on the back of some debit cards. Access to Customer Support Services: Customers opting to utilize the designated service provider to make card payments would also call that service provider with any service inquiries related to card payments. Consequently, SoCalGas will require the service provider to maintain adequate customer service resources to handle service inquiries expeditiously and professionally. In instances when a customer disputes a card payment, the service provider will be required to research the transaction with the credit card company or bank and provide details to the customer. If the details do not seem familiar, and the customer still wishes to dispute that they made the transaction, the dispute will become a charge-back and the customer s card will be credited for the disputed bill amount. Protection of Customer Information: Finally, SoCalGas will require the service provider to strictly maintain confidentiality of customer information, and to establish and maintain procedures to safeguard that information.

9 ATTACHMENT D Sample Informational Material Informational material is provided for illustrative purposes only. It is intended to outline generally what SoCalGas will say when customers are notified of these new service options. Appropriate modifications may be needed, depending on the means of communication, such as a bill insert, newsletter, website, or via a SoCalGas Customer Service Representative. SoCalGas now allows you to pay your gas bill by credit or debit card through a duly authorized independent service provider. To pay your bill with a credit or debit card, all you need is a touch-tone phone, your Gas Company account number and credit card or debit card. A fee of $X.XX for each credit card transaction and $X.XX for each debit card transaction will be charged by ABC Payments, the independent service provider. Simply call the service provider at their toll- free number, , to pay by credit or debit card.