DukeSolutions to Exit, Two to Enter Gas Market in Georgia
After marketing natural gas to Georgia customers for a little
less than a year, DukeSolutions, a unit of Duke Energy, has decided
to throw in the towel. The marketer, which only has firm contracts
with 16 customers on the Atlanta Gas Light system, filed a petition
with the Georgia Public Service Commission (GPSC) to cancel its
"Certificate of Authority" to provide natural gas marketing
services in Georgia.
"What we are doing in Georgia in just representative of what we
are doing all over the country," said DukeSolutions spokesman Rick
Wirth. "We are, for the most part not taking physical title to
natural gas or electricity anymore." Instead he said, the company
plans on focusing on other energy services. "There is no state in
the country where we are taking physical title." Wirth said
DukeSolutions is still a retail services provider, but will now be
focusing on demand-side services, information services and the
management of the procurement of natural gas and electricity.
In its filing, the company points out that its few customers
whose contracts expire at the end of November have been informed
that: DukeSolutions does not plan on renewing their contracts;
DukeSolutions has filed with the GPSC for withdrawal of its
certificate and will not be marketing retail natural gas service on
a "going-forward basis" in Georgia; and that they should seek
alternative service providers within the state.
"Quite frankly, the energy markets did not mature at the pace we
had hoped for," said Wirth. "So we sort of refocused. We have been
doing this [refocusing] for about the last year."
If granted approval to exit the market from the GPSC,
DukeSolutions would become the latest addition to the growing list
of gas marketers that have either filed for bankruptcy, or just
packed up shop in Georgia.
In September, Southeastern States Energy became the third retail
marketer to file for bankruptcy protection since deregulation began
in the state nearly two years ago (see NGI, Sept. 4). The others
include Peachtree Natural Gas, which filed for Chapter 11
protection in October 1999, and Titan Energy, which filed in July
(see NGI, July 10). Southeastern's parent company, Perry Gas, also
was forced to file for bankruptcy protection primarily because of
its subsidiary's financial problems in Georgia. With DukeSolutions'
departure, only 11 gas marketers of the original 21 will be left to
serve the Georgia deregulated market.
Even with all of the exits Georgia has experienced, some
marketers still see Georgia as a profitable territory. PowerTrust,
a Reston, VA-based full service energy marketer has agreed to
purchase Perry Gas' Southeastern States Energy for $4 million
pending the outcome of its ongoing bankruptcy case (see NGI, Sept.
18). PowerTrust has already requested entrance as a marketer from
the GPSC to market gas in the state. The New Power Company, an
alliance of Enron, American Online and IBM has also requested entry
into Georgia's deregulated gas market. Both companies said that if
they were accepted they would plan to market gas to Georgia
customers over the Internet (see NGI, Nov. 13).
Sean Collins, vice president of industry relations for
PowerTrust thinks that the Georgia market is ripe for new
organizations to come in and reinvigorate deregulation. By entering
"two new companies into that market, PowerTrust and The New Power
Co. should revitalize the competitive environment," he said.
Even though the Duke filing expressed a pretty firm marketer
exit by DukeSolutions from the troubled Georgia gas market, the
company included a back door policy. "DukeSolutions expressly
reserves the right to apply at a later time for the issuance of a
new Certificate of Authority and asks that its current certificate
be canceled without prejudice," DukeSolutions said in its filing.
"We still have quite a presence in Georgia, we have sales
offices in Atlanta," said Wirth. "Georgia is still important to us,
it's just that natural gas and electricity in the physical are
not." The spokesman said he does not anticipate any difficulty from
the GPSC in canceling its certificate.