Gov. Bill Owens recently signed Colorado’s gas deregulationbill, SB99-153, opening the door for voluntary unbundling by thestate’s gas utilities. The question now is how many utilities willwalk through the opening?

The bill allows Colorado’s nine utilities to volunteerunbundling plans for their respective service areas to the ColoradoPublic Utilities Commission (CPUC). The commission decidescontroversial issues such as capacity assignment, provider of lastresort and whether LDCs should be forced to exit the merchantfunction. Once the plan is approved, the utility can then open upits service area.

The Commission also is required to conduct a study on theentire deregulation bill and present it to the state legislature byDec. 1, 2000. The report will serve as an update on the unbundlingprocess and, more importantly, determine whether the state shouldrequire an unbundling mandate for all utilities. It also willdetermine if the state should install statewide customer protectionrules.

“If the state government is not happy with the number ofutilities that are participating in this new forum, then they candecide to make all of them do so. That is this report’s majorfunction,” said Terry Bote, a CPUC spokesman.

Bote added that none of the utilities are expected to submitprograms for at least six months. Once submitted, the unbundlingprocess is expected to take between six months to a year tocomplete.

The Public Service Co. of Colorado, the state’s largest gasutility, said it was in favor of the legislation but would not acthastily. “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 thatalthough the company will not start deregulating right away, itwill start itemizing customers’ bills so they can start comparingprices.

KN Energy, the LDC for 50,000 customers in northeast Coloradoand the western slope of the state, has already decided to open itsservice areas to competition. With its ongoing unbundling programsin Nebraska and Wyoming, KN Energy’s affiliate, KN Energy GasService has an advantage in deregulating Midwest markets and plansto be extremely active in Colorado, said KN Energy spokespersonSara Hansen.

One concern that was dealt with in the legislature was aprovision that would allow some municipal utilities to keep frompublic eyes information deemed to be sensitive from a competitivestandpoint. The bill was amended to require a public hearing todetermine 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, arguedthat these hearings would tip off rates to competitors. He said ifthe public hearing determines that the records should be open, itwould “be like getting into the ring with one hand tied behind ourback. And that would be kind of stupid on our part.” Tollefson saidhe is unsure whether to recommend unbundling for the utility ornot.

John Norris

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