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DukeSolutions to Exit, Two to Enter Gas Market in Georgia

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.

Alex Steis

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