New rules for Ohio retail gas marketers were finalized Tuesday by state regulators. The Public Utilities Commission of Ohio (PUCO) put the finishing touches on rules that will require marketer certification, allow governmental aggregation for competitive retail natural gas service and will provide regulators with much greater consumer protection authority.

The rules, which follow Amended Substitute House Bill 9 signed March 27, 2001 by Governor Bob Taft, establish technical, managerial, and financial requirements that competitive retail natural gas suppliers and natural gas aggregators must meet to be certified to provide service in Ohio. A bond will have to be posted by each marketer. Regulators also will have more authority to provide consumer protections particularly regarding marketing, customer enrollment, complaint handling, disconnection, and contract disclosure.

“There have been cases in the past where individuals have complained to the PUCO and the PUCO had to throw the complaints out based upon the fact that it didn’t have appropriate authority over the marketers, which weren’t certified here,” said spokesman Matt Butler. “This will assure that in future circumstances like that we will be able to take the appropriate action.”

The rules, which still must be reviewed by the Joint Committee on Agency Rule Review, also will authorize the PUCO to order large natural gas companies to provide distribution service on an open, non-discretionary basis. In addition, they will establish a process for competitive retail natural gas migration cost recovery and set reporting requirements and enforcement procedures to ensure that retail natural gas suppliers and aggregators follow the rules.

“This isn’t intended to limit competition here,” said Butler. “It’s just to ensure consumers are protected. There was a company called Energy Cooperative in the Cincinnati area that bailed out and left a lot of people stranded last summer and fall. This would make sure that the companies have the technical and financial wherewithal to continue operating” even in a tough market.

However, at least one Ohio regulator thinks these rules are too much for the competitive market to bear just to provide a little extra customer security. In a concurring opinion, Commissioner Donald L. Mason said he would recommend the rules be changed to exclude the bond requirement for marketers. “The rules have been written without regard for the effect that they will have on creating or nurturing competition,” said Mason. “We are placing too much of a burden on marketers and effectively restricting their ability to pass savings on to consumers…

“Marketers have to pay for gas, storage and transportation many months before it is needed for consumer use. Those transactions represent ‘financial security’ far better than the posting of any bond or letter of credit,” he said.

The commission’s certification rules must become effective before July 26, 2002, when all retail natural gas suppliers will be required to be certified, as outlined in Amended Substitute House Bill 9.

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