National Fuel has filed an application with the PennsylvaniaPublic Utility Commission to begin a system-wide customer choiceprogram starting next April. The program would be a major expansionof the company’s current Energy Select pilot in Mercer County, inwhich 19,700 retail gas customers were allowed – actually forced -to choose alternative suppliers beginning in June 1997. Theexpanded program would offer a choice of suppliers to 210,000customers in National Fuel’s 14 county service territory. It alsowould include some significant differences from the Energy Selectpilot.

One major change is National Fuel’s decision to be a gas supplyoption for customers. In the pilot program, Southern Co. operatedas supplier of last resort, taking any customers that did notchoose among the three marketers participating: Texaco Natural Gas,Atlas Gas Marketing and National Fuel Resources, the utility’smarketing affiliate. However, last spring Southern opted totransfer 1,700 of those customers back to the utility because ofpayment problems. In effect there were two suppliers of lastresort. In addition, several town meetings revealed a strongcustomer interest in remaining with the utility, a spokeswomansaid.

The company intends to maintain mandatory upstreamtransportation capacity assignment, which should get somemarketers’ danders up. But Nat ional Fuel sees no other way ofdealing with the stranded cost issue. When pipeline contracts comeup for renewal it will shed them according to estimated future needand the ability of marketers to ensure reliable service, accordingto the spokeswoman.

“Our most important concern is reliability of gas supply to ourresidential customers,” said spokeswoman Donna L. DeCarolis. “Theplan as proposed maintains essential pipeline capacity to ensurethat our customers have sufficient gas supply in even the mostsevere weather conditions.”

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