While neighboring LDC Oklahoma Natural Gas continues its attemptto stave off unbundling, Arkla moved forward last week with acollaborative process involving stakeholders that is intended toproduce a downstream unbundling plan next April with full retailcompetition by October 1999.

“We had a real good turn out from interested stakeholders,including pipelines, marketers, commission people, public interestgroups and we spent a fair amount of time discussing how we hope toproceed and what the timeline would be given the calendar that’sbeen established in Oklahoma. It’s a fairly tight schedule,” saidPaul Ruxin, an attorney from Jones, Day, Reavis and Poge who isassisting the utility.

ONG has decided to delay its own collaborative process ondownstream unbundling pending a Supreme Court decision on itsappeal of the Oklahoma Corporation Commission’s unbundling order.In contrast to ONG, Arkla already has completed upstreamunbundling. “We’re proceeding down what appears to be anindependent path from ONG here,” said Ruxin. “ONG is stillsubstantially a vertically integrated system, but Arkla already hasbeen through the difficult act of becoming in effect a purecitygate-to-burner-tip entity. It’s that, plus a commitment byArkla to be a part of the new model, that [sets us apart fromONG],” he said.

In 1985, Arkla split its transmission and distributionoperations. Its pipeline operations have been FERC jurisdictionalfor the last six years. Arkla has been buying capacity on its ownaccord and making its own supply arrangements since theimplementation of FERC Order 636. “The main problem for ONG is itjust hasn’t gotten that far in the process,” said Arkla’s ChuckHarder, assistant general counsel.

Arkla has 115,000 customers in Oklahoma, mainly in smalldesegregated communities. The utility has no storage, peak shavingor compression, so alternative suppliers will have to carry lessutility baggage upon entering the Arkla system next winter. ButArkla intends to remain a competitor in its territory.

“Certainly we don’t think in the future that Arkla will be inthe regulated gas sales business,” said Ruxin. “When choice comesand it’s a competitive offering, Arkla’s participation as aprovider of commodity will be similar to that of other commodityproviders.”

Rocco Canonica

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