While deregulated electricity markets struggle in some places, retail natural gas competition thrives in nearly a dozen states, such as Georgia, where it has been in effect for almost a decade, according to a panel of gas utility and marketer representatives at the annual meeting of the National Association of Regulatory Utility Commissioners (NARUC) last week in Anaheim, CA.
“Gas supply is not an inherently monopolistic function, everybody can do it, and in some cases, the folks do it really well,” said Jeffrey Murphy of Dominion East Ohio Gas, who noted that his utility can only lose money providing the gas supply function. “Like some of the people on this panel, we in Ohio have some outstanding suppliers who bring all kinds of expertise. We run pipelines, we build, read meters, answer phones — the critical areas in which we felt we added value.”
Utilities in Ohio apparently have willingly turned over the retail merchant gas function to providers such as Interstate Gas Supply (IGS), which began in the late 1980s as a commercial/industrial gas provider and expanded into the mass residential/small business markets when Ohio began retail competition. IGS operates in another five Midwest and Eastern states where retail customer choice is in various stages of development.
Utilities, gas suppliers and the state regulators all play key roles, said IGS’s Vince Parisi, so his marketing firm focuses on customers, of which it currently has more than 270,000. “We’ve found as competition develops, innovation tends to follow [the mantra of the telecommunications industry for two decades now],” Parisi said.
Another national energy retail marketer, one of the pioneers based in nearby Costa Mesa, CA, publicly held Commerce Energy is having a good year in its operations in California and nearly a dozen other states, according to Anthony Cusati, Commerce’s senior market manager. It continues to serve a variety of customers, residential through the largest commercial/industrial customers.
“We’re in business to help customers control their energy costs, and we resell natural gas and electricity, although we own no generation or gas production,” Cusati said. Offering both brown and green (renewable) generated power, Commerce promotes what Cusati called “a variety programs in the resident and commercial market space.
“We’re trying to give the customer a choice and the chance [through fixed-rate deals] to smooth out their energy costs.”
In Georgia, one of the oldest competitive retail gas markets, the market has “reworked itself pretty well,” according to Hank Linginfelter, an executive with AGL Resources, the Atlanta-based holding company for Atlanta Gas Light and five other East and Southeast utilities. “After the 10 years of experience, we know now that customers choose gas suppliers based on things other than price. So far in Georgia, everything is working pretty well.”
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