SOUTHLAND

Step in Natural Gas Deregulation: Southern California Gas Co. is expected to file a proposal with the state Public Utilities Commission on Thursday to change the way regulators oversee the company’s operation--one of the final steps in a decade of deregulation of the state’s natural gas utilities. The plan would replace formulas used in determining utility earnings--traditionally based on the cost of providing service, plus a guaranteed profit--for a much-simplified process that would base earnings on how well a utility performs. The market-oriented method of reduced regulation is being proposed--or already used--at energy utilities nationwide. San Diego Gas & Electric Co. has been using such a system for nearly two years. The Southern California Gas proposal calls for an across-the-board rate reduction, rates indexed to inflation and the utility’s productivity, and rate refunds if customer satisfaction falls below certain levels.