The American Gas Association said yesterday 30% of the U.S.households with gas service, or 17 million homes, have or soon willhave the opportunity to purchase their natural gas from a supplierother than their local gas utility.

“Now gas utilities in 21 states and the District of Columbiahope to further increase competition and give residential customersbroader choices by enabling them to purchase their natural gasindependently,” AGA President and CEO David Parker said inannouncing an update of the association’s report, titled ProvidingNew Services to Residential Natural Gas Customers: A Summary ofCustomer Choice Programs and Initiatives. The report providesnumerous details of the programs. However, it contains noinformation about actual participation by customers or marketers inthe numerous pilots operating across the country. In many of thosepilots, participation has been low.

The level of competition in the residential gas sectornationwide still is very poor, according to the Arlington, VA-basedconsulting firm of Hagler Bailly. The firm’s National ACCESS Indexscores the current level of residential natural gas competitionnationwide at 1.6 on a scale of 1-100. The index measures theopenness of the market based on a number of components, not leastof which are state regulatory policies. According to the index,commercial gas competition isn’t moving much faster, with a scoreof 12.9 out of 100. A recent Salomon Smith Barney report thatexamined pilots by 41 LDCs in 16 states concluded many utilitieshave made only halfhearted attempts at installing successfulcustomer choice programs. “Although initial customer reaction hasbeen favorable, the number of eligible customers that have signedup to participate [in retail customer choice pilots] has beendisappointing,” according to Salomon Smith Barney. “Customers arenot convinced of any potential benefit.”

But AGA spokeswoman Peggy Laramie said for many LDCs the goalisn’t to convince customers to participate, it’s to test outcustomer education, marketer relationships and so forth. For us itwas more important to show opportunities for choice.. From a policypoint of view.we believe that giving customers opportunities tochoose alternative suppliers of natural gas is the goal of thewhole competition in the gas industry on the residential side. Justbecause a customer doesn’t switch doesn’t mean that they haven’tmade a choice.” For additional details from the report see AGA’swebsite: www.aga.com.

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