Concerned that a threshold number of Atlanta Gas Light (AGL)customers in certain warmer regions of Georgia may not switch toalternative suppliers by the next winter heating season, theGeorgia Public Service Commission is taking action to changeGeorgia’s gas competition law, SB 216, to get AGL out of themerchant function possibly by next fall.

“We’re contemplating an aggressive move on being able to getAtlanta Gas Light out of the consumer sales,” Commissioner Lauren(Bubba) McDonald told NGI. “The legislation that is being discussedby the commission would be a change in the present law that wouldescalate the commission’s authority as far as moving AGL’scustomers into the competitive marketplace.”

There are nine gas consumer regions in the state that wereseparated because of differing supply mixes and upstreamtransportation. Under the current law when 33% of the customers ina given region, or pool, have switched to alternative suppliers,the others are notified and given 100 days to choose a marketer. Ifthey haven’t chosen a marketer by the end of that 100 days, the lawcalls for the commission to randomly assign them to a marketer.

Currently some areas are very close to reaching the 33%threshold. A total of 397,000 customers, or 28% of AGL’s 1.45million customers, have switched to alternative suppliers sincecustomer choice began four months ago. The Athens pool has thehighest participation rate at 27.3%. The other most active areasinclude Macon, with 25.2%; Augusta, 23.6%; Newnan, 23.2%; Atlanta,which has 968,000 customers making it the largest pool, with 21.7%;and Rome, with 20.8%. However, customer choice hasn’t caught on aswell in the regions farther south where winter heating isn’t muchof an issue. Customer participation in Savannah is at 16%. InValdosta, it’s 17.4%, and in Brunswick, which is the farthest southof all nine areas, participation is at only 12.9%. With the end ofthe heating season approaching, the PSC is concerned several of thepools in Georgia could go through at least one more heating seasonunder AGL’s wing.

“This could go on for a long period of time and we would stillhave AGL in the consumer sales,” said McDonald. “I’m concerned thatwe’ll have some 200,000 customers out there still with AGL after amillion have already switched over. Are there going to be strandedcosts that those 200,000 are going to have to eat? We don’t know.

“If we move forward with this legislation, we would initiate aneffort with timely notice to all consumers that we would expediterandom assignment prior to some point in time.” He said that pointin time could coincide with the expiration of AGL’s volumetrictransportation pricing program on Sept. 30.

An Atlanta Gas Light spokesman said the company has not seen thelegislation and therefore could not comment accurately on anydetails of the PSC’s plans. However he did say the utility wasgenerally in favor of switching all its customers at one timerather than on nine different dates.

“One thing that has happened over the last months has beenconfusion about gas rates, confusion about gas deregulation. Ifyour company was faced with imposing a deadline for when 1.45million customers must choose a marketer or be assigned one andcommunicating that to all your customers, you would want to do itall at once,” said AGL’s Ross Willis. “If you’ve got nine differentpool groups on nine different schedules with all the overlap andmedia messages, you are going to have a lot of confusion about whatthe deadline is. So it would make sense from just an administrativeperspective.to do them all at once.”

But the legislation also is expected to give the PSC more powerto regulate daily balancing. McDonald indicated the PSC feels itneeds greater freedom to step in when there is a question aboutbalancing penalties. “We would rather have a better grasp on thatrather than it being left out there for the company to handle allby itself,” he said. “It’s basically supposed to be a pass throughright now. It would continue to be so, but if it got out of hand,i.e., through excessive penalties or some of the directions, maybe,that the company would like to take, we just wouldn’t have to gothrough all the hearing processes to be able to take action. Wewould just have a little firmer handhold on it.

“Since we are responsible for making this work, we think weshould stick our neck out a little bit more and take a strongerapproach and a heavier hand and see if we can’t do what Atlanta GasLight Co. wanted to do in 1997 through the legislative process andget out of consumer sales.

“I told Atlanta Gas Light’s new president this is what you askedfor now you’re going to get it. Now that’s pretty blunt, butsometimes they get a little blunt with us too.”

McDonald said the PSC is working with the leadership of both thehouse and the senate and expects the legislation to be introducednext week. “If it’s not introduced next week then there probablywill be no legislation because we are presently just a day overhalf of the Georgia legislative session.”

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