Deregulated

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) in Anaheim, CA.

Southern Co. said Friday that subsidiary Southern Company Gas, a retail natural gas marketing business in the deregulated Georgia market, signed a letter of intent to negotiate the sale of its Georgia assets, including contracts with about 170,000 retail customers (a 12.5% market share) to a new affiliate of Cobb Electric Membership Corp., an electric cooperative serving 185,000 customers.

While marketers continue to drop out of Georgia’s deregulated natural gas market five years after its inception, the state’s customer choice program remains remarkably competitive and rate competition and falling wholesale costs should lead to attractive winter pricing, according to the state public service commission.

Marketing and trading is central to a deregulated natural gas market, and it is gradually and very quietly being restored as producers and utilities hire traders to build their marketing departments. Traders who once worked for major marketers who were part of the “midstream meltdown are being dispersed into smaller shops,” said Edward M. Kelly, head of North American gas and power consulting for Wood Mackenzie.

Just as it seemed Georgia’s deregulated natural gas marketer list was ready to shrink by one more, the Georgia Public Service Commission said Tuesday that it has approved the application of Coweta-Fayette EMC Natural Gas Inc. to be a gas marketer. With the commission’s latest action, Georgia now has 10 certified gas marketers in the state.

FERC Chairman Pat Wood III said last week that if the Commission can “get ourselves out of the way, then we can move to a deregulated market” that offers more responsive customer service and more technological innovation. Speaking in Washington, DC, before a meeting sponsored by Cambridge Energy Research Associates (CERA) and Accenture, Wood said he wanted to let the Commission become a “much more distant referee,” and hopes his tenure leads to an “urgency to end the debate” that will lead to full competition within the power market.

With California caught in the “midst of a profoundlyserious…crisis” in its deregulated energy markets, the CaliforniaPublic Utilities Commission (CPUC) has called on FERC to “actimmediately” on its complaint against El Paso Natural Gas toprovide some price relief for natural gas and electric customers inthe state.

Dismissing the criticisms of a few of the expected competitorsin Texas’ coming deregulated electricity market, the Public UtilityCommission has adopted rules that require affiliate powergeneration companies unbundled from current integrated utilities tosell entitlements to their power generation. PUC said the ruleswould benefit electric customers by proving a more competitivewholesale market when it begins Jan. 1, 2002.

Dismissing the criticisms of a few of the expected competitorsin Texas’ coming deregulated electricity market, the Public UtilityCommission last week adopted rules that require affiliate powergeneration companies unbundled from current integrated utilities tosell entitlements to their power generation. PUC said the ruleswould benefit electric customers by proving a more competitivewholesale market when it begins Jan. 1, 2002.