Comments filed with the Maine Public Utility Commission showmarketers are opposed to all but the minimum registrationrequirements to participate in retail gas competition, while thestate’s new LDCs would like a significant amount of commissionoversight, particularly in the small customer market. The commentswere in response to the PUC’s Notice of Inquiry (NOI) into theRegulation of Gas Marketers, which was issued late last month.

The commission intends to get a head start on the rapidlychanging gas industry in the state. Maine’s gas infrastructure isexpected to see exponential growth over the next five years as twonew major pipelines, the Portland Natural Gas Transmission Systemand Maritimes and Northeast Pipeline, and three new distributioncompanies, CMP Natural Gas, Bangor Gas and Mid-Maine Gas, install asignificant amount of new long-haul and distribution pipeline.

The NOI also noted LDC Northern Utilities is proposing to expandunbundled service to all commercial and industrial customers soonand to residential customers over the next few years. In addition,the commission has approved or is reviewing rate proposals for thenew start-up LDCs that propose to offer unbundled services tovarying extents. “Consequently,” the PUC said, “the time is rightto explore the public necessity for oversight of gas marketersproposing to sell gas to consumers within the state.”

Enron disliked even the mention of the word “regulation” in theNOI title. “The process of restructuring natural gas in Maine is,in part, about deregulating potentially competitive services, notabout regulating services or marketers as suggested by the title ofthis [NOI].” Enron said industrial gas customers have beentransporting gas for several years without marketer registration orregulation and without an incidence of customer dissatisfaction ormarketer failure. Operational requirements in LDC tariffs and termsand conditions of the private agreements between marketers andcustomers are sufficient to guarantee reliable service and shouldcontinue to be so, Enron argued. Furthermore, the marketer suggeststhere be minimal registration requirements for gas marketersserving residential customers. The name, address and phone numbersof the company, as well as a copy of the articles of incorporationshould suffice, Enron said.

Northern Utilities, on the other hand, believes all marketersshould be licensed by the state and should be required to meet eachLDC’s financial qualifications standards. Licensing, Northern said,”introduces a level of credibility that will help ease consumers’initial concerns…,” minimizes inefficiencies by making itpossible for gas marketers to prepare only one application to thestate rather than one to each LDC, and would satisfy LDCs that needto ensure marketers can fulfill their contractual obligations.

CMP Natural, another state LDC, called for even more oversight.Although it said commission oversight may not be needed in thelarge customer market, CMP suggested a significant amount ofmarketer regulation in the residential and small commercialmarkets.

Despite warning the PUC that erecting “unnecessary barriers toentry” could “impede growth and development of a robust gasmarket,” CMP Natural offered some regulatory suggestions thatmarketers said will stifle competition. One such item was thesuggestion that a marketer registration process include “anapplication fee, or a posting of a security that would besufficient to show good faith on the part of the marketer.”

“No, no, no, no,” said Martha Duggan, director of regulatoryaffairs at Statoil Energy, a potential retail marketer in thestate. “An application fee is just a pure barrier to entry.”Statoil, along with Enserch Energy, jointly recommended minimalregistration requirements, but conceded there may need to belicensing of residential marketers, including a requirement thatmarketers demonstrate adequate financial and technical capability.However, the two marketers suggested the PUC redirect its attentionto regulation of utility marketing affiliates, which potentiallycould receive subsidies from utility firm rate payers.

The commission is expected to review whether to request furthercomment, initiate more formal proceedings, or pursue legislation inthe upcoming session.

Rocco Canonica

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