KN Gas Services emerged as the market leader from thethree-month-long Agricultural Choice Gas Program in Nebraska, as itsigned 36% of the customers who participated in the program. Theresults of the pilot program were released last week by KN Energy.

The program, which provides agricultural customers in Nebraskathe opportunity to select their natural gas provider, was designedto benefit customers in KN Energy’s service area by creatingcompetitive pricing and increased customer service. The selectionperiod ran from Jan. 20 to March 15, and customers in Nebraska hadthe opportunity to select from six natural gas suppliers. Customerswho didn’t return a selection form were defaulted to their previoussupplier.

The final tallies of the 10,000 customer program show KN GasServices received the majority of the marketplace. Midwest UnitedEnergy received 32% of the market, with KN Energy receiving 15% andPost Rock Gas receiving 12%. Public Alliance for Community Energy(PACE) received 3% and Oneok Gas Marketing received 2%.

The program included some of the most volatile gas prices inyears, KN Energy said. According to Dan Watson, vice president ofKinder Morgan’s (KN Energy’s parent company) retail operations, therare fluctuation in prices can be directly attributed to the risingcost of oil. Prices ranged from 27 cents/therm to 34 cents/therm.

“Recent hikes in the cost of oil have impacted the natural gasmarket. As a result the market prices during the AG Choice Gasselection period were volatile, changing almost daily. We stronglyencourage customers to check with their supplier to validate theprice they received during the selection process,” said Watson.

The agriculture program is an extension of KN’s deregulationeffort in the state. Last year, its retail choice program underwentsevere scrutiny, as other marketers claimed the playing field wasnot level. After all the customers were tallied from the100,000-person, two-year operation, KN Gas Services received 44%,KN Energy received 36%. A band of other marketers filed a lawsuitin June of last year in the U.S. District Court of Colorado. Itsought over $30 million in total damages and costs. The case wasresolved amicably last fall, a Kinder Morgan spokesperson said.

John Norris

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