Kansas Eyeing Gas Choice for All Customers
Kansas, a significant natural gas producing state, is sticking
its toes in the water of retail gas competition with a notice of
inquiry (NOI) from the Kansas Corporation Commission (KCC), "the
goal of which is to explore whether extending restructuring to all
retail consumers is in the public interest. We also wish to explore
other regulatory alternatives which may bring benefits to smaller
retail gas consumers."
While the majority of Kansas retail gas consumers still do not
qualify for transportation-only service, the KCC recently approved
several requests by LDCs to reduce the threshold level at which
customers can choose their gas suppliers. Initially, the KCC is
looking at several alternatives to expand choice. They include the
following: allowing all retail customers to choose suppliers,
modifying the purchased gas adjustment (PGA) mechanism to include
performance-based rate-making and/or modifying the KCC's purchase
contract review process, and requiring LDCs to utilize a
competitive bidding process to determine both gas and pipeline
capacity purchases. Other alternatives also will be considered, the
KCC said in its NOI.
Additionally, KCC staff has developed six general principles it
believes any customer unbundling plan should adhere to. They are:
1. Traditional bundled sales service should remain
available to all customers.
2. Residential customers should not have an interruptible
3. Residential and firm commercial customers choosing
unbundled service must be held responsible for the remaining term
of firm pipeline capacity contract for on their behalf.
4. The utility should be the supplier of last resort and
allowed to recover reasonable costs of serving in such a capacity.
5. Affiliate rules should apply to utilities participating
in a competitive market.
6. Unbundling should allow for customer aggregation for
The KCC is requesting comment on specific questions from LDCs
and other interested parties within 60 days of receipt of the NOI,
which was filed Feb. 11.
Joe Fisher, Houston
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