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Billing Controversy Surrounds Georgia Deregulation

Billing Controversy Surrounds Georgia Deregulation

Atlanta Gas Light Co. (AGL) will be the first to say that warm weather and fixed prices can cause trouble. In a situation that has caught the eye of Georgia's Public Service Commission (PSC), AGL's new unregulated rates have enraged hundreds of customers who, because of warm weather, have not used much gas, but still received winter-like gas bills. The public outcry caused the PSC to schedule a vote on Jan. 5 to determine whether a hearing should be held to examine re-regulating the state's gas industry. If the commission decides a hearing is necessary, it will be held Jan. 26 with a decision to come shortly thereafter.

"With the extremely warm temperatures we've experienced this fall, the timing couldn't have been worse for unbundling," said Paula Rosput, President and COO of AGL. "If weather had been colder than normal, the average customer would have noticed a lower cost per unit of natural gas than last year."

The controversy stems from a fixed demand charge AGL installed when the state deregulated. This charge, which is part of the consumption charge on monthly bills, has increased the average consumer's December bill 20-30% compared to the same period last year. AGL said that charges are necessary in order to recover costs expended for reservation fees that ensure the delivery of natural gas supplies to Georgia from interstate pipeline transmission companies.

"In order to make it possible for competition to come in, AGL sustained extra costs that would not normally have been there. We implemented a fixed rate charge in order to recover those costs," said Ross Willis, an AGL spokesman.

The PSC has a different view of the fixed demand charge. "It looks as though AGL is trying to collect as much as they can before customers leave the system," said Stan Wise, a PSC commissioner. "AGL is billing a year's worth of charges over a five-month period and the charges are based on what a customer typically uses, not what they actually use."

Rosput had an answer for accusations that AGL is overcharging. "There is no basis for the suggestion that we are marking up these costs," said Rosput. "In fact, we actually fell short on the collection of these costs in the months of October and November."

PSC spokesman Shawn Davis said the commission has received hundreds of calls from irate customers. "Here is one example. This customer paid an $800 gas bill last month. Guess how many dekatherms he used? None."

Davis continued to say that customers could switch to an alternate supplier to solve the problem "but we don't want people to feel forced to switch. We'd like to see them take their time in choosing somebody else."

Since AGL opened their market in November, 128,000 people out of a 1.4 billion person pool have switched to one of 19 certified suppliers in the state. "AGL is charging 90% of their previous customer base too much," Davis said.

John Norris

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