Arkla Begins Unbundling Process
While neighboring LDC Oklahoma Natural Gas continues its attempt
to stave off unbundling, Arkla moved forward last week with a
collaborative process involving stakeholders that is intended to
produce a downstream unbundling plan next April with full retail
competition by October 1999.
"We had a real good turn out from interested stakeholders,
including pipelines, marketers, commission people, public interest
groups and we spent a fair amount of time discussing how we hope to
proceed and what the timeline would be given the calendar that's
been established in Oklahoma. It's a fairly tight schedule," said
Paul Ruxin, an attorney from Jones, Day, Reavis and Poge who is
assisting the utility.
ONG has decided to delay its own collaborative process on
downstream unbundling pending a Supreme Court decision on its
appeal of the Oklahoma Corporation Commission's unbundling order.
In contrast to ONG, Arkla already has completed upstream
unbundling. "We're proceeding down what appears to be an
independent path from ONG here," said Ruxin. "ONG is still
substantially a vertically integrated system, but Arkla already has
been through the difficult act of becoming in effect a pure
citygate-to-burner-tip entity. It's that, plus a commitment by
Arkla to be a part of the new model, that [sets us apart from
ONG]," he said.
In 1985, Arkla split its transmission and distribution
operations. Its pipeline operations have been FERC jurisdictional
for the last six years. Arkla has been buying capacity on its own
accord and making its own supply arrangements since the
implementation of FERC Order 636. "The main problem for ONG is it
just hasn't gotten that far in the process," said Arkla's Chuck
Harder, assistant general counsel.
Arkla has 115,000 customers in Oklahoma, mainly in small
desegregated communities. The utility has no storage, peak shaving
or compression, so alternative suppliers will have to carry less
utility baggage upon entering the Arkla system next winter. But
Arkla intends to remain a competitor in its territory.
"Certainly we don't think in the future that Arkla will be in
the regulated gas sales business," said Ruxin. "When choice comes
and it's a competitive offering, Arkla's participation as a
provider of commodity will be similar to that of other commodity
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