Legislation has been introduced in the Virginia General Assemblythat would establish a framework for gas restructuring in thestate. Columbia Gas of Virginia, the first LDC in the state toimplement a gas supply choice program, is a main proponent of thebill, SB1105, which is being sponsored by State Sen. Charles Colgan(D-Manassas). A companion bill is being sponsored by Del. EricCantor (R-Henrico) in the House.

“Columbia of Virginia thought it was important for the VirginiaGeneral Assembly to express their public policy and generalinterest in the subject,” said Laura Bateman, vice president ofpublic affairs for Columbia Gas of Virginia. She said differentparties have different views on whether legislation actually isrequired for LDCs to move toward customer choice and increasedcompetition. “We just thought if there was any uncertainty, itwould be better to have legislation and a blueprint showing how toproceed. It gives more of a clear path for [the state corporationcommission to implement customer choice].”

The gas bill authorizes utilities to implement statewidecustomer choice programs after gaining approval from the statecorporation commission. It does not mandate that LDCs unbundle orexit the merchant function, however. Gas companies that want tocontinue supplying gas to customers as they have in the past cancontinue to do so.

“What’s imporant in this legislation is that there is no mandatethat every gas company in the state do this,” said Bateman.

The legislation would require competing residential and smallcommercial suppliers to be licensed by the state. It also wouldprovide that suppliers are not subject to state and local grossreceipts taxes, but it would allow localities to impose a consumerutility tax on gas provided by gas suppliers so there would be noloss of revenue.

The bill is expected to be amended by a new substitute billlater this week, said Bateman. The new bill includes some differentlanguage that ensures LDCs will be able to retain the gas merchantfunction and remain suppliers of last resort. It also would alterthe language governing recovery of stranded costs, to cover only”non-mitigable” stranded costs rather than “100% stranded costrecovery.”

Virginia state regulators have been moving slowly on the issueof competition in the gas and electric industries but a task forcehas been convened to look at the issues involved. It also hasapproved several gas choice pilot programs, including one forColumbia and another for Washington Gas Light.

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