Before handing down a final decision, the Florida Public ServiceCommission decided last week it needed one last look at the detailsof a commission staff proposal that would require the state’s gasutilities to file small customer unbundling tariffs by next March.PSC commissioners requested staff schedule at least one moreworkshop during which it would present the details of the proposedunbundling rule to the commissioners.

“What the commission said was ‘look you probably have theanswers to the questions we’re asking because you have been workingon it for two or three years but we just need to satisfy ourselvesbefore we vote on a rule,'” said commission spokesman Kevin Bloom.He believes the new rule will be approved before the end of theyear, calling for utilities to implement unbundling tariffsallowing all nonresidential customers in the state to buy their gasfrom nonutility suppliers. Staff also is recommending utilities begiven the option of filing a tariff to unbundle down to theresidential level.

So far the debate has been pretty much as expected: mostutilities oppose further unbundling down to the small customerlevel while marketers are eager to open up the state to retailcompetition. No Florida utility has eliminated customer usagethresholds for supplier choice or offered transportation to allnon-residential customers. However, City Gas and Peoples Gas Systemhave aggregation tariffs that allow marketers to accumulate theloads of several customers to meet certain utility thresholdrequirements. Peoples’ program has generated three times theinterest the utility expected.

Although successful, the aggregation programs have limitations,according to commission staff. Peoples imposes a threshold limitand restricts the amount of marketer and customer participation.City Gas requires marketers to sign new customers before convertingexisting customers to transportation service. City Gas did,however, eliminate threshold limits.

“The aggregation programs are a step in the right direction;however, it is a very small step,” staff noted in its report to thecommission. Customers in Florida experience discrimination becauseeach utility has different threshold limits. A customer may notmeet the volume threshold imposed by its utility, but a competitordown the street with the same volume qualifies for transportationservice simply because he is served by a different utility withdifferent threshold limits.

Staff recommends the commission propose Rule 25-7.0335, whicheliminates all threshold limits and requires all investor-ownedutilities to provide transportation service to all non-residentialcustomers.

The proposed rule also would allow utilities to offertransportation service to residential customers. Despite the factthat residential customers make up a very small portion of totalgas demand in Florida, in certain locations such as self-containedsubdivisions with large homes and restaurants, residentialtransportation may be cost-effective to both the customer and theutility, according to staff.

Staff had originally suggested Dec 31 as the due date forunbundling tariffs but extended it to March at the urging ofseveral utilities. Some utilities complained about the expense ofhaving to modify their computer systems and billing mechanisms tohandle additional transportation customers. Staff estimated Peopleswould be burdened with largest costs: a one-time charge of $10-23million and recurring yearly costs of about $8 million.

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