AGA: Choice an Option in Most U.S. Homes

Nearly half of the U.S. households with natural gas service already can or soon will be able to buy their fuel from a competitive supplier, demonstrating how quickly competition is growing in the natural gas industry, according to a study by the American Gas Association.

In an updated report released yesterday, AGA noted that nearly 49%, or 26 million of the 54 million U.S. households with natural gas service, could now or will soon be able to buy their natural gas from a non-utility supplier. Customer choice has steadily grown in the past four years, with customer choice offered to fewer than two million customers nationwide before 1996, according to AGA.

The report, "Providing New Services to Residential Natural Gas Customers: A Summary of Customer Choice Pilot Programs and Initiatives," said that competition exists in 23 states and the District of Columbia. About 20%, or nearly one in five households with a choice option, already has switched suppliers, said the report.

"With energy prices on the rise, households that may not have previously considered purchasing their natural gas from a marketer may be thinking about it," said Bruce McDowell, AGA director of policy analysis. "While there is no guarantee of savings, consumers may find some of the non-utility programs to be attractive."

Unlike traditional programs, where natural gas utilities purchased natural gas for residential customers and passed along the cost of the gas commodity through monthly bills, customer choice allows consumers to shop around for a supplier and have the gas delivered to them by the local natural gas utility.

AGA reports that more than 95% of large-volume natural gas customers, including factories and electric power plants, may select their own natural gas supplier. Also, nearly 70% of commercial natural gas customers, such as hospitals and office buildings, have a choice in suppliers.

New York, which offers a statewide customer choice program, leads the country in the potential number of customers who may choose their supplier, with 4.1 million customers and a potential demand of 339.5 Bcf. California, which offers customer choice to about 4.07 million customers, is second with a potential demand of 254.9 Bcf. Pennsylvania is third, offering choice to 2.49 million customers and a demand of 217.9 Bcf, while New Jersey is fourth with 2.25 million customers and 1.96 Bcf demand.

AGA represents 189 local natural gas utilities that deliver natural gas to 60 million homes and businesses in all 50 states. For more information on the report, visit the website at www.aga.org.

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