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Kansas Eyeing Gas Choice for All Customers

Kansas Eyeing Gas Choice for All Customers

Kansas, a significant natural gas producing state, is sticking its toes in the water of retail gas competition with a notice of inquiry (NOI) from the Kansas Corporation Commission (KCC), "the goal of which is to explore whether extending restructuring to all retail consumers is in the public interest. We also wish to explore other regulatory alternatives which may bring benefits to smaller retail gas consumers."

While the majority of Kansas retail gas consumers still do not qualify for transportation-only service, the KCC recently approved several requests by LDCs to reduce the threshold level at which customers can choose their gas suppliers. Initially, the KCC is looking at several alternatives to expand choice. They include the following: allowing all retail customers to choose suppliers, modifying the purchased gas adjustment (PGA) mechanism to include performance-based rate-making and/or modifying the KCC's purchase contract review process, and requiring LDCs to utilize a competitive bidding process to determine both gas and pipeline capacity purchases. Other alternatives also will be considered, the KCC said in its NOI.

Additionally, KCC staff has developed six general principles it believes any customer unbundling plan should adhere to. They are:

1. Traditional bundled sales service should remain available to all customers.

2. Residential customers should not have an interruptible service option.

3. Residential and firm commercial customers choosing unbundled service must be held responsible for the remaining term of firm pipeline capacity contract for on their behalf.

4. The utility should be the supplier of last resort and allowed to recover reasonable costs of serving in such a capacity.

5. Affiliate rules should apply to utilities participating in a competitive market.

6. Unbundling should allow for customer aggregation for balancing purposes.

The KCC is requesting comment on specific questions from LDCs and other interested parties within 60 days of receipt of the NOI, which was filed Feb. 11.

Joe Fisher, Houston

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