Agreeing that Georgia’s natural gas deregulation program is flawed but not foundering, a Blue Ribbon Natural Gas Task Force empowered by Gov. Roy Barnes recommended last week that the state not give up on the more than three year-old initiative. Instead, the group decided on a list of proposals to reform the program, including the reinstitution of a single regulated marketer.

Through previous meetings with the task force and concerned parties, a list of 25 potential recommendations were brought to the table at the group’s Wednesday meeting in order to form a final set of recommendations for submission to the governor. The task force consisted of 19 members, including state legislators, consumer advocates, state officials and all five commissioners from the Georgia Public Service Commission (GPSC).

“The task force basically agreed to recommend to the governor that a regulated marketer be chosen and introduced into the marketplace,” said Andrew Harris, director of government relations at Georgia Tech. Harris acts as an adviser to the task force chaired by Wayne Clough, president of Georgia Tech. Likening Georgia’s deregulation plan to an all or nothing approach, Harris highlighted other states such as Pennsylvania and Ohio — which left the established utility in place as a supplier of last resort and added unregulated marketers — as models. Harris said the task force agreed that it would be “appropriate” to insert one marketer as a regulated utility back into the marketplace, while maintaining the unregulated marketers as well.

“I think our model was actually an okay model,” Harris said of Georgia’s initial deregulation program. “It just wasn’t implemented in the right fashion. It moved too fast, it should have been done over a couple-of-years-period and AGL [Atlanta Gas Light] should have been able to stay in the [regulated] business longer.” He added that it did not help that in the year after deregulation was fully implemented was the coldest December in Georgia history.

Saying that the state of deregulation in Georgia has gotten better recently, Harris said he thinks a lot of consumers would still like to have the option of signing up with a regulated marketer. He added that the regulated marketer would also likely become the provider of last resort as well.

As for the possibility of putting Georgia’s natural gas service back under a regulated monopoly structure, Harris said the topic was discussed by the task force, but will not be recommended to the governor. “To go back to the model that we had as a regulated monopoly would cause considerable confusion,” he told NGI. “You had problems going from zero to 100, and you’re going to have significant problems going from 100 back to zero as well.”

The time involved in the transition would also be overwhelming. Harris said it would take about a year or more and approximately $50 million for AGL to gear back up with a billing system while becoming a gas provider again. In addition, Harris pointed out that almost a thousand people would lose jobs as the unregulated marketers were put out of business. It could cost a couple of hundred million dollars to pay anticipated claims by marketers who would be put out of business, he said.

Harris also mentioned that there might be considerable political costs, as people take out their confusion and frustration on the GPSC and the General Assembly. Returning to a completely regulated system could also affect the state’s favorable business climate. “This could be something where you invite companies in to come do business, and all of a sudden you turn around three years later and say we are going to put you out of business,” Harris said. “That could have a chilling effect on companies who were thinking about coming to Georgia to do business.”

In addition to reaching a consensus on recommending the installation of a regulated marketer, the task force also agreed to recommend a host of other proposals to the governor’s office. The list includes:

Harris said he and Clough will present Barnes with a preliminary draft next week so that his office can start drafting some legislation. As for a finished report, Harris said he expects to have one finished in 10 days to two weeks.

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