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PA Governor Makes Gas Restructuring a Reality

PA Governor Makes Gas Restructuring a Reality

Pennsylvania Gov. Tom Ridge signed House Bill 1331 Tuesday, deregulating many aspects of the state gas industry and paving the way for statewide customer choice to begin Nov. 1.

Ridge touted the signing as a move that puts Pennsylvania at the front of the energy competition race. "Through this new law, Pennsylvania continues to be the national leader when it comes to energy competition," he said. "We have the No. 1 electric competition program in the country, and now we'll be the first state to let our homeowners shop for both electric power and natural gas."

Of the nearly five million housing units in Pennsylvania- including houses, condominiums and apartments-over two million use natural gas as a heating source, according to the Pennsylvania Public Utilities Commission (PUC). The signing of this bill will automatically mean a lower gas bill for these customers, thanks to the elimination of the 5% Gross Receipts Tax (GRT), which was included in the legislation. He said the elimination of this tax will save each family using gas to heat their homes $55/year for a total of $82 million.

Other stipulations in the bill include an LDC rate freeze until Jan. 1, 2001 and mandatory capacity assignment until July 2002. LDC affiliates are allowed to market in their parent company's service area, but the bill requires the PUC to create and enforce a strict LDC affiliate code of conduct. The bill allows, but does not mandate, LDCs to exit the merchant function.

The bill was forged from the results of a statewide collaborative made up of all interested marketers, labor parties, LDCs and regulators. Rep. Frank Tulli (R-Dauphin) and Sen. Jeff Piccola (R-Dauphin) submitted companion bills to their respective state houses. The Senate approved their version, SB 601, in May. After a series of changes and delays (including a title change from SB 601 to HB 1331), the bill finally won approval from both houses last week (See Daily GPI, June 18)

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