Daily GPI / NGI All News Access

Compromise is Key for PA Deregulation Bill

Compromise is Key for PA Deregulation Bill

After months of debate and compromise between regulators, marketers and LDCs, SB 601 was introduced to the Pennsylvania legislature earlier this week, moving residential and small commercial gas customers one step closer to gas supply choice. The next step for the bill will come on March 23, when the Senate Consumer Protection committee will hold a hearing on the bill.

"This is a compromise bill, so everybody has things that don't sit right with them," said Terry Murphy, a Columbia Gas of PA spokesman. "But, in a more important sense, the compromise demonstrates the underlying feeling that there should be total gas deregulation and that it is time for our state to move forward."

Murphy said Columbia supports the bill, despite criteria which make it less than perfect. "The bill includes a rate cap which will freeze LDC rates from the time the bill is passed until Jan. 1, 2001. Now obviously, as an LDC, we don't think [the rate cap] is necessary. But marketers will tell you that they don't like the mandatory capacity assignment requirement in the bill that allows LDCs to assign existing capacity until July 2002. Its give a little, take a little."

Bill Boswell, a spokesman for Peoples Gas which serves 350,000 PA gas customers, said a main reason why his company supports the bill is because the language allows for LDCs to remove themselves from the merchant function if they want. "It is an attractive option to hold. The bill permits, but does not require LDCs to exit the merchant function. Right now, the thinking is [Peoples] will stay in the merchant function. But who knows? Five, 10, 15 years down the line, things might be different. It is nice to know that the language is already written in the legislation to allow us to take the initial steps." Boswell added representatives of Peoples Gas are scheduled to testify at the March 23 hearing in support of the bill.

Martha Duggan, a spokesperson for Statoil Energy, said her company also supports the bill and looks forward to marketing gas in the new environment. "As a compromise bill, we are happy, and we think it will work."

She said one of the most important compromises occurred in letting LDC affiliates market gas in the state. "The bill lets affiliates of LDCs market gas, but requires the Public Utilities Commission (PUC) to establish a code of conduct and monitor those affiliates' behavior. We welcome affiliates as another incentive to competition, as long as we both are playing on a level field."

National Fuel Gas, a gas utility serving 195,444 customers in Pennsylvania, is one company that has spoken against the bill. It is scheduled to testify at the Consumer Protection hearing as well. "We don't want to make any specific statements yet," said NFG spokesperson Julie Coppola. "We're still working to make the bill better but, as of now, we don't support it."

©Copyright 1999 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

Copyright ©2018 Natural Gas Intelligence - All Rights Reserved.
ISSN © 2577-9877 | ISSN © 1532-1231
Comments powered by Disqus