While marketers continue to drop out of Georgia’s deregulated natural gas market five years after its inception, the state’s customer choice program remains remarkably competitive and rate competition and falling wholesale costs should lead to attractive winter pricing, according to the state public service commission.

“It looks like the prices are going down,” said Bill Edge, spokesman for the Georgia Public Service Commission (GPSC). “All the marketers have dropped their prices from September, which is good news for consumers right now.”

He noted that despite concerns earlier in the year that the storage refill was lagging, it now appears to be normal for this time of year.

Currently, Georgia Natural Gas (GNG) is offering the lowest rate in the state under a special fixed rate of 74.9 cents per therm for retail customers signing up for its 12-month fixed rate plan during October. In addition, GNG’s variable market price for October is 74.9 cents per therm, a 9% decrease from a month ago and the lowest market price currently available, the company said. GNG said lower wholesale prices in response to rising storage inventories allowed the company to offer lower fixed rates.

Scana Energy also has a special deal in place, The company lists a variable rate of 79.9 cents per therm, a fixed rate of 79.9 cents per therm with 12-month commitment and a fixed rate of 78.9 cents per therm with a six-month commitment.

Shell Energy Services is also offering 79.9 cents per therm with a 12-month commitment. The company noted that its customers who locked in with a guaranteed fixed rate before the 2002-03 winter season were protected from cold weather price increases. As a group, Shell said, its fixed rate customers saved $14 million over what they would have paid on a variable plan from November 2002 through April 2003.

For October pricing with variable rate plans, the GPSC tabbed GNG’s Marketer Advantage as the lowest “Apples to Apples” price per therm at $1.28, which includes all applicable marketer charges. ACN Energy logged the highest at $1.85/therm.

For fixed plans, Walton EMC Natural Gas came in with the lowest total charge of $1.14/therm, while marketer Infinite Energy maxed out at $1.24/therm.

News of improving competitive rates comes at a much needed time as the deregulation program absorbs another hit. Energy America, Centrica’s U.S. retail gas marketing subsidiary, is calling it quits in the Georgia retail gas market after struggling to build its customer base there last year and then being hit with a fine and other penalties last month by the GPSC for slamming (see Daily GPI, Oct. 8).

Half of the original 21 marketers have departed, while four Georgia marketers have filed for Chapter 11 bankruptcy protection, including Titan Energy of Georgia, Inc., Southeastern States Energy, Inc., Peachtree Natural Gas LLC and The New Power Co. (see Daily GPI, Oct. 29, 1999; July 10, 2000; Aug. 31, 2000; June 13, 2002).

Launched in October 1998 (see Daily GPI, Oct. 12, 1998), gas deregulation in Georgia has been watched closely by other states as a test case and has performed well despite the significant bumps in the road.

Georgia tops the list for customer participation in a report by the American Gas Association (AGA) detailing state and utility choice programs for residential customers (see Daily GPI, Sept. 11; Sept. 12). Choice succeeded in Georgia because the legislature forced all the and commercial residential customers of utility Atlanta Gas Light (AGL) to choose an alternative supplier other than the utility, or be allocated to a new supplier. The program succeeded, in effect, because customers had no choice. They were forced off-system.

Next to AGL’s 100% residential choice participation rate, which covers 1.4 million households, Kinder Morgan’s retail program in Nebraska shows a 98% participation rate with 74,000 participants. Next on the list are Dominion East Ohio Gas at 49% or 551,000 customers participating and Columbia Gas of Ohio with 47% or 582,000 customers participating. Columbia of Kentucky had 33% participation or 41,500 customers.

“We are always glad to see that the market is competitive,” said Edge. “That was the whole reason for deregulation of the gas market in Georgia.”

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