Kansas, a significant natural gas producing state, is stickingits toes in the water of retail gas competition with a notice ofinquiry (NOI) from the Kansas Corporation Commission (KCC), “thegoal of which is to explore whether extending restructuring to allretail consumers is in the public interest. We also wish to exploreother regulatory alternatives which may bring benefits to smallerretail gas consumers.”

While the majority of Kansas retail gas consumers still do notqualify for transportation-only service, the KCC recently approvedseveral requests by LDCs to reduce the threshold level at whichcustomers can choose their gas suppliers. Initially, the KCC islooking at several alternatives to expand choice. They include thefollowing: allowing all retail customers to choose suppliers,modifying the purchased gas adjustment (PGA) mechanism to includeperformance-based rate-making and/or modifying the KCC’s purchasecontract review process, and requiring LDCs to utilize acompetitive bidding process to determine both gas and pipelinecapacity purchases. Other alternatives also will be considered, theKCC said in its NOI.

Additionally, KCC staff has developed six general principles itbelieves any customer unbundling plan should adhere to. They are:

1. Traditional bundled sales service should remainavailable to all customers.

2. Residential customers should not have an interruptibleservice option.

3. Residential and firm commercial customers choosingunbundled service must be held responsible for the remaining termof firm pipeline capacity contract for on their behalf.

4. The utility should be the supplier of last resort andallowed to recover reasonable costs of serving in such a capacity.

5. Affiliate rules should apply to utilities participatingin a competitive market.

6. Unbundling should allow for customer aggregation forbalancing purposes.

The KCC is requesting comment on specific questions from LDCsand other interested parties within 60 days of receipt of the NOI,which was filed Feb. 11.

Joe Fisher, Houston

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