Retail marketers have been dropping like flies in Georgia, andbilling problems have been mainly to blame. As the Georgia PublicService Commission was putting the finishing touches on a notice ofproposed rulemaking (NOPR) last week that would punish retailmarketers for not getting accurate bills out on time, anothermarketer filed for Chapter 11 bankruptcy protection apparentlyrelated to billing problems in the Atlanta gas market.

Southeastern States Energy became the third retail marketer tofile for bankruptcy protection since deregulation began nearly twoyears ago. The others include Peachtree Natural Gas, which filedfor Chapter 11 protection last October, and Titan Energy, whichfiled in July. Southeastern’s parent company, Perry Gas, also filedfor bankruptcy protection in a federal bankruptcy court in Houston,TX, last Monday, primarily because of its subsidiary’s financialproblems in Georgia.

However, Southeastern’s attorney said the situation is notnearly as dire as that of Titan or Peachtree. For one thing,Southeastern serves only 10,000 retail customers in the state,which is far fewer than Titan’s 50,000 and Peachtree’s 170,000.

In addition, Southeastern says it is not behind on any of itspayments. “Southeastern States is current on all of its obligationsto the pipeline and to AGL,” said Tom Dickinson, Perry Gas’attorney. “It is not in arrears with anyone, and it has no securedcreditors. It is not late on paying any bills.

“This is not going to be a chaotic reorganization, or an attemptat a reorganization like Georgia experienced with Peachtree andTitan,” he said. “It is a completely different situation. It’s muchsimpler, much less dire. We have some cash flow problems that weneed to work out and we have some billing and data issues we needto get the answers to.

“Going forward we hope to be able to figure out what happened tomake sure it doesn’t happen in the future, but we are not taking aPollyannaish view of anything. We understand that issues may arise,and we are trying to be prepared for those. I know it sounds reallystrange that we don’t know what has happened, but we really don’tknow,” said Dickinson. “We do not have access to all of thecustomer invoice data because that is managed by Powertrust.com.”

Southeastern uses Powertrust as its billing client and customercontact partner. Powertrust, a marketing and billing company basedin Northern Virginia, apparently is in the process of providing theaccouning and billing information needed for a complete analysis ofSoutheastern’s marketing operations in Georgia. “We think that isgoing to answer a lot of our questions, but it is so voluminous andwe’ve obviously had so much going on in the last week that wehaven’t really had an opportunity to dive into it and analyze itand figure out whether it answers all of our questions or not,”said Dickinson.

PowerTrust.com CEO Rick Rumbarger said his company supportsSoutheastern and its parent company, Perry Gas, and has “offered tobe helpful in any way that we can during this difficult process.PowerTrust.com will make every effort to assure that our customersexperience no disruption of service or other difficulties as aresult of Perry’s reorganization. We stand by the customers weserve.”

Dickinson acknowledged, however, that Perry Gas recently filed alawsuit against Powertrust. Last week, he said, the suit wasdismissed because it originally was an effort to obtain theinformation Perry needed to determine the cause of its financialwoes. “The lawsuit was really just a request for an accounting…There was no allegation of wrongdoing or impropriety orincompetence. When we got what was represented to be thataccounting, we decided that since they appeared to be acting ingood faith it was prudent on our part to dismiss the lawsuit.”

Dickinson also noted, however, that he only recently found outthat Powertrust is trying to become a fully certificated marketerin the Georgia gas market. “They had not been shy in letting usknow that they had an interest in taking a full role in Georgia sowe were not totally surprised by that – a little bit surprised,maybe, but not terribly.” He said he wasn’t sure that Perry wouldcontinue using Powertrust as a billing agent once it became acompeting marketer.

Southeastern intends to tell the PSC it is “going to be businessas usual,” said Dickinson. “This is not going to affect Georgiacustomers. There aren’t going to be any interruptions in service.Obviously business as usual needs to improve a little bit and thatis what we are working on now.”

Another source who requested anonymity noted that if this werean isolated incident and Southeastern was the only retail marketerwith a problem, there would be an argument that the situation wasunique to Southeastern. “But if everybody is having these kinds ofproblems and they are so widespread, what is the commondenominator? Atlanta Gas Light is.”

Dickinson noted that Perry Gas has been active in other retailmarkets and has encountered no billing or financial problems. “Wedon’t handle residential customers elsewhere, but we have thousandsof retail customers (commercial and industrial) elsewhere and don’thave any of these kinds of problems. It is a mystery” why thecompany’s problems have been confined to Georgia.

During a commission meeting with marketers late last month,several marketers indicated that Atlanta Gas Light “did contributeto some of the overall billing issues,” which have triggered anenormous number of complaints by customers to the Commission. ButAGL “was not seen as the major cause of the problems,” saidCommissioner Robert Baker in an interview with NGI last week.

AGL spokesman Nick Gold said the company intends to review itsinternal processes to determine if it contributed to Southeastern’sproblems in any way. “We are certainly looking into it.”

The PSC is expected to vote on a notice of proposed rulemakingon billing issues during Tuesday’s administrative session. The NOPRis designed to encourage marketers to make their bills accurate andget them out on time.

“This NOPR is offered as something to provide some relief toconsumers who are not getting billed. The critical provision isthat the bill shall be deemed timely only if it is sent by themarketer or a designated agent to a customer within 90 days afterthe marketer has received a meter read from the distributioncompany,” said Baker. If the marketer fails to get the bill out,the customer is no longer under any obligation to pay the billunless there was a signed agreement between the marketer and thecustomer that allows the marketer to send bills out late. There’salso a provision for accuracy. The bill has to be at least 90%accurate or there is a payment waiver. “One of the good parts thatstaff has included,” said Baker, “is a consumer bill of rightsregarding untimely bills.”

Baker said he is “very disappointed” about the third marketerbankruptcy. “We’re doing everything we can to make the gas marketunder deregulation succeed, but that is out of our hands.”

Rocco Canonica

©Copyright 2000 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.