The way one observer sees it, Oklahoma Natural Gas and ONEOK GasTransportation can ask for whatever they want in their jointrestructuring filing with the Oklahoma Corporation Commission(OCC); they won’t get everything. “It’s a pretty bold proposal. Ican tell you, ONG’s not going to get what they filed for. If you’reasking for something, you might as well ask for the moon,” said thesource, who asked to be anonymous.

Last week’s upstream unbundling filing with the OCC details howONG intends to carry out the competitive bidding process outlinedin OCC rules adopted in January. Under those rules, ONG willsolicit competitive bids for upstream services, including gastransportation, storage and supply, that are required for theoperation of the company’s distribution system. The applicationalso identifies the upstream assets to be owned and operated byONEOK Gas Transportation. “I think people are surprised by theaudacity of shifting so many assets into distribution,” theobserver said. He also noted ONG did not file any written testimonywith its plan, which is lacking data on such things as demand,existing gas contracts and existing pipeline capacity agreements.

“I would say putting an unbundling plan together in almost twomonths is almost unprecedented,” said David Crisp, ONG manager ofrates and regulatory reporting. Crisp said ONG’s plan is “fair andreasonable. “We created aggregation systems that enhance thepossibility of multiple pipelines serving those aggregationsystems.”

The filing requests permission to lower the volume requirementsfor industrial customers who wish to participate in the company’spipeline capacity lease program. It also asks the OCC forpermission to charge flat monthly rates for various classes ofcustomers. For residentials, the rate would be $17.96; for smallcommercial and industrial customers, $21.26; and for low-incomeresidentials, a discounted flat rate of $12.98. Currently,customers pay the utility through a step rate system tied to theamount of gas flowing through their meters. Spokesman Weldon Watsonsaid the switch to flat rates would be revenue neutral to thecompany.

The observer predicted “a huge push” to get more informationfrom ONG as well as a number of proposals for alternate plans.Commission staff also might be asked to come up with an alternateplan. “I think you’ll see some of the other parties coming up withvastly different proposals. I’d say at least two, maybe three. Myguess is those other three alternate plans will likely coalesceinto one.”

Joe Fisher, Houston

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