There are still no takers in a plan to unbundle Colorado’s gasutilities, but at least two utilities may be warming to the idea. Ameeting last week of the Colorado Public Utilities Commission (PUC)to discuss natural gas local distribution company unbundling, gasutility plans and consumer issues concluded with only two companies— the largest ones serving the state — reporting that theymight provide unbundling programs. Just not now.

Why the hesitation? Most point to low gas prices in the statealready, but the dozen or so energy companies also appear to not seeany clear advantage to them or to consumers in offering theprogram. It was more than a year ago when Gov. Bill Owens signedlegislation setting the stage for retail deregulation (see Daily GPI,June 2, 1999). Despite the smoothpassage of the restructuring bill through the state’s legislature, allhas not gone as smoothly with reluctant energy companies and reluctantconsumers.

However, Public Service of Colorado (PSCo) and Kinder Morgan,which markets through KN Energy, reported that they may soonpresent plans to the PUC to offer unbundling services forprospective Colorado customers.

PSCo is the state’s largest gas utility, but officials there saythey still don’t have a plan ready to submit. KN Energy, whichserves 50,000 customers in Northeast Colorado and the westernslope, said last year it was stepping up plans to open its serviceareas to competition, mirroring successful efforts through itsChoice Gas program in Nebraska and Wyoming. However, last week, KNEnergy officials said they were backing away from quicklyimplementing such a program for at least a year.

PUC’s Barbara Fernandez said that without companies submittingunbundling plans, and without consumers and industry requestingthem, it may be months before the PUC has enough information to setrules for unbundling, as required under the approved legislation.Until then, the PUC will continue to hold hearings on the issue,but there are no plans to begin writing the regulatory framework,with the exception of licensing rules. More public educationefforts also are planned to gauge consumer interest.

The state has never embraced unbundling programs asitsneighbors have. In November 1999, members of the ColoradoElectricity Advisory Panel capped a 15-month study ordered by theColorado Legislature with a vote of 17-12 that restructuring “isnot in the best interests of all Colorado electricity consumers andthe state as a whole.”

At the PUC hearing last week, some of the panel’s negativefindings were echoed by energy company officials: Colorado is alow-price gas state and, therefore, it makes unbundling lessattractive because of the cost to implement it; unbundling mightrequire more consumer protections, and thus more rulemakings; andit could dampen recovery of costs for investments that utilitieshave made already.

Another problem, said the panel, was that many of Colorado’sconsumers favor renewable energy sources, and feel that offeringchoice will lower the state’s and the energy companies’expenditures in that area.

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