Pennsylvania Rep. Frank Tulli, one of the sponsors of a statenatural gas deregulation bill that stalled last year, said thelegislation once again is on the fast track now that Gov. Tom Ridgehas proposed eliminating the 5% gross receipts tax levied on thestate’s residential gas users.

Dealing with the potential loss of $120 million/year in grossreceipts taxes collected by utilities once competition begins won’tbe that difficult now that the state has $200-$300 million revenuesurplus, Tulli said in an interview with NGI. “The governor is avery smart guy. He waited until this budget season and on Tuesdayhe’s going to be delivering the budget message to the joint houseand senate and he is going to recommend that we eliminate the grossreceipts tax on natural gas and then use that as a springboard topass the natural gas legislation.

“We have the opportunity now in the first half of this year tobe the first state to have deregulated electricity and natural gasin a rather complete way,” he noted.

Columbia Gas of Pennsylvania CEO Gary J. Robinson praised thegovernor’s proposal. “As a leading proponent of the deregulation ofthe natural-gas industry in Pennsylvania, we believe that Gov.[Tom] Ridge’s proposal is a major step toward giving our customersthe economic democracy they want,” Robinson said. “Elimination ofthe gross receipts tax will remove one of the major obstacles tothe passage of a deregulation bill that will increase competition,leading to a host of new energy services and pricing options forcommonwealth residents.”

Collaborative discussions between industry stakeholders on thelegislation stalled last fall on the tax issue, said Tulli, butwill start again at Pennsylvania Public Utility Commission officesthis Friday. “We are going to start with introducing the bill as itwas and have the collaborative look it over and come up withconsensus legislation. Then we’ll go to the legislature with ourproduct and let them deliberate on it.

“We don’t have unanimity on getting this done this way so I’msure there will be those who will oppose it. Some LDCs want to getout of the merchant function and others don’t want to; they want tohave an option,” he said. There still are many contentious issuesto be ironed out, also including whether to have mandatoryassignment of upstream pipeline capacity to competing suppliers.Nevertheless, Tulli said he’s confident it can be done. Hepredicted passage of the bill by the end of the session on June 30.

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