Companion Pennsylvania gas deregulation bills for smallcommercial and residential customers appear to be quicklymaneuvering through the state legislative process. The Senateversion is expected to go for a floor vote this week. Meanwhile,the House held hearings on its version of the bill recently andsupporters said the results were positive.

The Senate bill (SB601) was voted out of the Consumer Protectioncommittee, where it had resided since early March, and into theSenate appropriations committee earlier this week. “We think itwill go to a floor vote [this] week, maybe as early as Wednesday,”said Mike Sarfert, a spokesman for Sen. Jeff Piccola’s office.Piccola is the main supporter of the Senate version while Rep.Frank Tulli is the main driver of the bill in the House.

“The electricity deregulation has gone over so well, and I thinkthat has helped the gas legislation,” Tulli said. “The bills arereceiving wide-ranging support from many stakeholders duringcommittee hearings, enabling the committees to get a good sense ofwhat the bills are all about.”

Tulli added that while he was happy with the bill’s progress inthe House (HB 937), he believes the Senate version will pass first.”It’s my guess that it will pass the Senate vote, be approved bythe House, then be sent off to the Governor for signing. Hopefully,the whole process will be done by June.”

Besides the success of electricity deregulation in the state,another factor aiding the legislation’s progression is the proposedelimination of the gross receipts tax (GRT), which is a 5% statetax added to monthly bills of gas utility customers (See NGI, Feb.1).

The deregulation bills were formed through the work of acollaborative, which included LDCs, marketers and regulators.Concerning major deregulation issues, the bills call for:

Mandatory capacity assignment through July 2002;

Allowing LDC affiliates into the market function with a strictcode of conduct;

A rate cap to be installed from the time the bill passes untilJan. 1, 2001; and

A Pennsylvania Public Utilities Commission (PUC) decision whento unbundle metering and billing operations.

Despite Piccola’s and Tulli’s bullish attitudes towards thelegislation, many other players have voiced opposition. A group ofinterested parties, headed by Enron, Shell and Connectiv, sent aletter to PUC Commissioners John Quain and Aaron Wilson in lateFebruary voicing their displeasure with the capacity assignmentrequirement and allowing LDCs into the merchant function. Alongwith these dissenters, National Fuel Gas, a gas utility serving195,444 customers in Pennsylvania, called the bill “ambiguous” andsaid it did not have enough reliability safeguards (See NGI, March29).

This marks the second time these two legislators have attemptedto push gas deregulation legislation through the state government.Their first attempt failed last fall.

John Norris

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