Despite the numerous troubles that have plagued the deregulated Georgia retail gas market since its inception in 1997, Georgia Public Service Commissioner Bobby Baker said yesterday in an interview that other states need to realize business-related matters rather than regulatory and legislative snafus were primarily to blame for the difficulties.

However, the legislature and the commission could have done more had they foreseen the pitfalls ahead, he noted.

The state has suffered through two marketer bankruptcies, numerous billing problems, and three “slamming” investigations, one of which resulted in a $100,000 settlement earlier this week with marketer Energy America.

“We’ve been the guinea pig for the rest of the country,” Baker noted. “Hopefully they’ve learned a lot of lessons from our experience and don’t have to go through the pain and agony that we have here in Georgia. I think deregulation of the gas market can work even for small consumers, but there has to be some safeguards put into the legislation by regulatory agencies to protect customers from slamming, from being hit with price increases or bearing a disproportionate share of the cost of gas service. Those are good lessons to be learned. Our experience here is going to help us when we initiate electric deregulation.”

The PSC settled a slamming case Tuesday with Energy America, requiring the marketer to pay $75,000 to an energy fund for elderly and low income customers and to pay $25,000 to the state treasury. The marketer also was required to drop the unpaid balances of all customers involved in the case and to develop new and better methods of dealing with customer complaints.

The slamming problems are among many issues that have tainted the Georgia deregualtion experience, but Baker isn’t ready to write it off as a failure unlike his colleague PSC Chairman Bob Durgen. Baker would like to distance himself significantly from the Chairman’s recent comments (see Daily GPI, July 20).

However, Baker is disgusted with the track record and the current situation in Georgia. He agrees with Durgen that some significant changes are required, particularly in the areas of billing and rate comparisons for customers. But he said he is not calling for “reregulation” and doesn’t plan to fight electric restructuring when it comes down the pike.

“I think the major lesson other state regulators and businesses throughout the country ought to focus on is that you had better have the fundamentals in place and operational before you decide to jump into this business and start serving gas customers in your deregulated marketplace because the business end of it is the Achilles heel,” Baker said.

“There were some problems that were caused by the legislation and by our rules, but the killer fatal errors that occurred that have driven companies into bankruptcy and out of the marketplace have been basic business issues: not having the financial resources, the warm winter weather and cash shortfalls, not having adequate billing systems in place to accurately and timely bill customers, not having trained customer service representatives who can respond to consumer inquiries and complaints and satisfactorily address those consumer complaints.”

Baker noted that there are some immediate issues that have to be dealt with in Georgia, including the continuing billing problems. One PSC staff member said four of the 13 marketers are still having billing problems and up to 20% of their customers still get their bills late. Some customers haven’t received bills in six months and have been calling the PSC begging to simply pay what they owe. Many are afraid that once they get a bill it will be enormous and will be due in 20 days. Baker said the commission at times has been virtually shut down by customer calls.

“At some point you have to tell the marketers [who have had billing problems] that ‘Hey you’ve had a fair amount of time. You’ve had adequate opportunities, and if you still can’t do it, then you are going to waive those charges to those customers and you are going to start taking it in the pocketbook. That ought to get your attention and focus your folks on straightening out the problem.’ Our staff attorney is working on drafting proposed language for that right now,” said Baker.

Commissioner Lauren McDonald said yesterday he thinks language will be drawn up that requires marketers to get bills out on time or else they will lose their marketing privileges in the state of Georgia.

The remaining thorn in the Commission’s side is in the area of marketer rates. July is the first month retail marketers in the state have been required by the PSC to file their gas rates for public comparison. Only two marketers, Scana and Infinite Energy, out of 13 have filed complete data. The rest have filed under “trade secret” and have been asked by the commission to re-file in the public record.

“It doesn’t do the public any good if you are sending us the pricing information under trade secrets,” said Baker, adding that the marketers are re-filing full information. “The problem that we’re seeing now is that everybody has a different method of charging customers for their service so we’re trying to get them all to provide information that is uniform that can be provided via our web site or to the newspaper.”

While most of the major pitfalls now appear to be behind Georgia regulators, the battle over the little things continues, he said.

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