Regulators Advised to Assess GA Unbundling
Georgia broke all records in unbundling 95% or 900,000 customers
from Atlanta Gas Light's merchant service in just nine months. Now
it's up to the policy-makers "to justify the amounts of savings,
determining if consumers are really better off," AGL President
Paula Rosput told state regulators Tuesday.
"We liken the program to WalMart and assume that the competition
among multiple suppliers will drive down costs through innovation,"
Rosput said in a presentation at the National Association of
Regulatory Commissioners' (NARUC) summer meetings in San Francisco.
Georgia's accelerated time frame was mandated by state law
requiring the unbundling to be completed by the time AGL's ongoing
rate case was completed in mid-1998.
Was it too fast? "Absolutely. [There was] too much compression
from the time of the law until the time the commission had to issue
its orders....just too many things being done, too quickly.
Considering the time frame, it is a real credit that things have
gone as well as they have," Rosput responded to questions.
It's the "eleventh hour" before the Georgia Public Utility
Commission's Aug. 11 date for customers to choose new suppliers.
After that date, the remaining customers will be assigned to
marketers. "In Georgia, we basically created a specter of 'unless
you want Big Brother to make a choice for you', you really ought to
get into the market," Rosput said. "More than 900,000 customers
(out of 1.5 million) have moved to marketers in nine months. No
other deregulation initiative comes close to this pace."
Partly the speed and partly the requirement that marketers
accept expensive upstream pipeline capacity that had been dedicated
to AGL has narrowed the field of marketers to those with enough
capital to play the game. Six marketers have picked up most of the
customers so far, with the two leaders, Scana Energy, an
unregulated affiliate of South Carolina Electric and Gas, and AGL
affiliate Georgia Natural Gas Services, holding the lion's share or
about 70% of those who have chosen. Peachtree Natural Gas, Shell
Energy Services, Columbia Energy Services, and United Gas
Management of Georgia are the other surviving marketers.
Meanwhile, AGL has experienced what Rosput calls two
"challenging quarters" financially since the customer choice
program began last fall, wrestling with growth of 2.5% annually and
growing productivity as its customer base is turned over to the
"Having deregulated natural gas in Georgia, we obviously embrace
a deregulation agenda that is done more broadly with a simpler,
standardized framework around it," Rosput said. Similar programs in
other states will make it easier for the consumer. Customer
education programs have been extensive, but they never get the full
resources they deserve, Rosput said. For example, in Georgia there
was not enough attention to non-English-speaking customers.
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