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Colorado Set for Retail Deregulation

June 2, 1999
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Colorado Set for Retail Deregulation

Gov. Bill Owens signed SB99-153 last week, opening the door for voluntary unbundling by Colorado's gas utilities. The bill had been passed by the state's House of Representatives then presented to the Governor May 17.

The bill allows utilities to volunteer plans to the Colorado Public Utilities Commission. The Commission decides controversial issues such as capacity assignment, provider of last resort and whether LDCs should be forced to exit the merchant function. Once the plan is approved, the utility can then open up its service area.

The Public Service Co. of Colorado, the state's largest gas utility, said it was in favor of the legislation but would not act hastily. "We're not going to submit a plan for a while. Right now, we're aiming to have one put together sometime near Jan. 1, 2000," said Mark Salley, a Public Service Co. spokesman. He added that although the company will not start deregulating right away, it will start itemizing customers' bills so they can start comparing prices.

KN Energy, the LDC for 50,000 customers in Northeast Colorado and the western slope of the state, has already decided to open its service areas to competition. With its ongoing unbundling programs in Nebraska and Wyoming, KN Energy's affiliate, KN Energy Gas Service has an advantage in deregulating Midwest markets and plans to be extremely active in Colorado, said KN Energy spokesperson Sarah Hanson.

One concern that was dealt with in the Senate was a provision that would allow some municipal utilities to keep from public eyes information deemed to be sensitive from a competitive standpoint. The bill was amended to require a public hearing to determine which municipal utility records could be closed.

For some utilities, however, the measure did not go far enough. Phil Tollefson, a director at Colorado Springs Utilities, argued that these hearings would tip off rates to competitors. He said if the public hearing determines that the records should be open, it would "be like getting into the ring with one hand tied behind our back. And that would be kind of stupid on our part." Tollefson said he is wavering on whether to recommend the utility should unbundle or not.

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