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Connecticut Takes Pulse of Gas Unbundling

Connecticut Takes Pulse of Gas Unbundling

Connecticut regulators last week issued a draft decision that takes a mid-course review of commercial and industrial natural gas unbundling in an effort to fine-tune the state's two-year-old program. The draft also was seen as a "first step" toward possibly achieving customer choice in the state's residential gas market further down the road.

"As you can see, we needed to fine-tune [commercial and industrial unbundling] a lot. I mean there are a lot of customers using it. There's no question about that. But there have been a couple of glitches...people who've been left short," said Beryl Lyons, a spokeswoman for the Connecticut Department of Public Utility Control (PUC).

In the Phase I draft, state regulators and market participants revisited a number of issues, including the need for shorter, less complex transportation agreements between LDCs and gas suppliers; the need for simplified and uniform tariffs; firm transportation rate design; nomination procedures for gas deliveries; balancing and capacity release. The draft ruling is expected to become final on July 22.

The commission's next step is to apply the revisions to the state's three LDCs - Connecticut Natural Gas, Southern Connecticut Gas and Yankee Gas Services, which combined serve about 476,000 gas customers in the state. "We would open up each of the three gas companies prior rate cases to put into effect the mid-course corrections that are discussed in the draft," noted Lyons. This will be followed by the commission undertaking Phase II of the review, where it will decide the fate of customer choice for residential gas users.

At this stage, "we don't know if there's going to be residential unbundling" in Connecticut, a state with a large poor population, Lyons told NGI. "Most of our suburbs don't have gas service. Gas is mainly in the inner cities," she noted, adding that the state's decision on whether to go ahead with residential unbundling will involve "a lot of social considerations" as a result. "You've got one company here whose uncollectibles are just unbelievable. They serve the two poorest cities in the state," she said.

"By the time we open up the three dockets for the three gas companies, get all of their tariffs in place and then begin with all of the myriad of issues that have to be dealt with in order to get to the potential for gas unbundling, it's going to be at least another year" before state regulators decide whether customer choice is a viable option in Connecticut, Lyons noted.

The commission will make the final decision on residential unbundling, she said, but added that state lawmakers are contemplating forming a task force to review the customer-choice issue - which could be a precursor to legislation. "I would watch to see what happens in next year's legislative session."

Susan Parker

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