The maelstrom in Atlanta Gas Light’s deregulated gas poolcontinued last week as regulators scrambled to find a replacementsupplier of last resort when the utility concluded it was unable tohandle the role. After an urgent 24-hour RFP, the state’s PublicService Commission (GPSC) selected Shell Energy Services to performthe function through April 1.

The matter was undertaken with some urgency because 170,000retail gas customers are hanging by a thread. Their marketer,Peachtree Natural Gas, filed for Chapter 11 bankruptcy earlier thismonth (see NGI, Nov. 1) as a result of what it described as”unexpected costs” and problems with Utilipro, a utility billingcompany. The day after the filing, AGL asked for bankruptcy courtpermission to petition the GPSC for a random assignment of all ofPeachtree’s customers to more “creditworthy” suppliers.

The court, headed by Hon. Robert Brizendine, has met twice sincelate October and each time has allowed Peachtree to continueserving its customers by paying a fee to AGL. In total, theRoswell, GA-based marketer has agreed to over $2.7 million worth ofpayments due by Nov. 15, which is the date the court willreconvene.

“Although we do not want to make a practice of this, we’rebasically operating in a pay as you go fashion,” said MillicentHunter, a spokeswoman for AGL. “Our priorities are the reliabilityof service for the customers and the integrity of the system. Asthe situation currently stands, these interim solutions in whichPeachtree basically puts up the money to continue doing businessare the best way to maintain reliability at this point.”

Regarding the need for a supplier of last resort, which thestate’s deregulation law calls an “interim pooler,” Hunter said theLDC’s role has changed and it no longer has the ability to performthe task.

“The tariff states that AGL will be the interim pooler unlessthe commission assigns another marketer to perform the task. Wefully supported the commission in its desire to designate anothercompany for that role.

“We don’t want to be the interim pooler because we’re alreadyout of the retail function. The utility no longer has its ownbilling or remittance mechanisms, so getting back into retail wouldbe extremely arduous. We have nobody buying gas and nominating itto the system.”

Bobby Baker, a GPSC commissioner said “AGL has made it clearthat it does not want to be the interim pooler. If AGL isn’tinterested and there is another marketer willing to step up to theplate, then that is fine,” he said. “Our interest is making surethat we have a reliable supplier that can handle the addition ofextra customers. In our view, Shell was it.”

While four other marketers (Scana, Energy America, ReliantEnergy Services and SouthStar) applied for the role along withShell, none fit the bill as well as Shell did. “Shell answered allthe questions in the RFP to the satisfaction of the commissionwhereas the others didn’t,” Baker said.

“This probably should have been done during the make-up of thederegulation legislation, but this whole process has been alearning experience,” said Bubba McDonald, a GPSC Commissioner. “Wedidn’t think about it until a situation came up that brought it toour attention.”

The commissioner pointed out that the interim pooler process wasundertaken as a preparatory measure and in no way is specific toPeachtree’s customers. Shell will now have the responsibility oftaking on the customers of any supplier that is deemed unable toreliably serve gas by the GPSC.

Last week’s developments have come at the tail end of a processin which more than 1.4 million customers have switched suppliersfrom AGL to one of 16 marketers in a 12-month period.

John Norris

©Copyright 1999 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.