After months of debate and compromise between regulators,marketers and LDCs, SB 601 was introduced to the Pennsylvanialegislature earlier this week, moving residential and smallcommercial gas customers one step closer to gas supply choice. Thenext step for the bill will come on March 23, when the SenateConsumer Protection committee will hold a hearing on the bill.

“This is a compromise bill, so everybody has things that don’tsit right with them,” said Terry Murphy, a Columbia Gas of PAspokesman. “But, in a more important sense, the compromisedemonstrates the underlying feeling that there should be total gasderegulation and that it is time for our state to move forward.”

Murphy said Columbia supports the bill, despite criteria whichmake it less than perfect. “The bill includes a rate cap which willfreeze 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] isnecessary. But marketers will tell you that they don’t like themandatory capacity assignment requirement in the bill that allowsLDCs to assign existing capacity until July 2002. Its give alittle, take a little.”

Bill Boswell, a spokesman for Peoples Gas which serves 350,000PA gas customers, said a main reason why his company supports thebill is because the language allows for LDCs to remove themselvesfrom the merchant function if they want. “It is an attractiveoption to hold. The bill permits, but does not require LDCs to exitthe merchant function. Right now, the thinking is [Peoples] willstay in the merchant function. But who knows? Five, 10, 15 yearsdown the line, things might be different. It is nice to know thatthe language is already written in the legislation to allow us totake the initial steps.” Boswell added representatives of PeoplesGas are scheduled to testify at the March 23 hearing in support ofthe bill.

Martha Duggan, a spokesperson for Statoil Energy, said hercompany also supports the bill and looks forward to marketing gasin the new environment. “As a compromise bill, we are happy, and wethink it will work.”

She said one of the most important compromises occurred inletting LDC affiliates market gas in the state. “The bill letsaffiliates of LDCs market gas, but requires the Public UtilitiesCommission (PUC) to establish a code of conduct and monitor thoseaffiliates’ behavior. We welcome affiliates as another incentive tocompetition, as long as we both are playing on a level field.”

National Fuel Gas, a gas utility serving 195,444 customers inPennsylvania, is one company that has spoken against the bill. Itis scheduled to testify at the Consumer Protection hearing as well.”We don’t want to make any specific statements yet,” said NFGspokesperson Julie Coppola. “We’re still working to make the billbetter but, as of now, we don’t support it.”

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