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PA Deregulation Bill Poised to Pass First Hurdle

PA Deregulation Bill Poised to Pass First Hurdle

Companion Pennsylvania gas deregulation bills for small commercial and residential customers appear to be quickly maneuvering through the state legislative process. The Senate version is expected to go for a floor vote this week. Meanwhile, the House held hearings on its version of the bill recently and supporters said the results were positive.

The Senate bill (SB601) was voted out of the Consumer Protection committee, where it had resided since early March, and into the Senate appropriations committee earlier this week. "We think it will go to a floor vote [this] week, maybe as early as Wednesday," said Mike Sarfert, a spokesman for Sen. Jeff Piccola's office. Piccola is the main supporter of the Senate version while Rep. Frank Tulli is the main driver of the bill in the House.

"The electricity deregulation has gone over so well, and I think that has helped the gas legislation," Tulli said. "The bills are receiving wide-ranging support from many stakeholders during committee hearings, enabling the committees to get a good sense of what the bills are all about."

Tulli added that while he was happy with the bill's progress in the House (HB 937), he believes the Senate version will pass first. "It's my guess that it will pass the Senate vote, be approved by the House, then be sent off to the Governor for signing. Hopefully, the whole process will be done by June."

Besides the success of electricity deregulation in the state, another factor aiding the legislation's progression is the proposed elimination of the gross receipts tax (GRT), which is a 5% state tax added to monthly bills of gas utility customers (See NGI, Feb. 1).

The deregulation bills were formed through the work of a collaborative, which included LDCs, marketers and regulators. Concerning major deregulation issues, the bills call for:

Mandatory capacity assignment through July 2002;

Allowing LDC affiliates into the market function with a strict code of conduct;

A rate cap to be installed from the time the bill passes until Jan. 1, 2001; and

A Pennsylvania Public Utilities Commission (PUC) decision when to unbundle metering and billing operations.

Despite Piccola's and Tulli's bullish attitudes towards the legislation, many other players have voiced opposition. A group of interested parties, headed by Enron, Shell and Connectiv, sent a letter to PUC Commissioners John Quain and Aaron Wilson in late February voicing their displeasure with the capacity assignment requirement and allowing LDCs into the merchant function. Along with these dissenters, National Fuel Gas, a gas utility serving 195,444 customers in Pennsylvania, called the bill "ambiguous" and said it did not have enough reliability safeguards (See NGI, March 29).

This marks the second time these two legislators have attempted to push gas deregulation legislation through the state government. Their first attempt failed last fall.

John Norris

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