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
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."
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