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Perspective

Fortnightly Magazine - December 1997

would be willing to conduct joint sales calls or offer joint promotions with a non-affiliate. If the utility can work with a marketer - any marketer - to bring a new customer on the system or increase the gas usage of an existing customer, throughput is increased. And increasing throughput is the bottom line: That is how the utility earns its revenue.

Some may argue that if the utility can go on joint sales calls or offer joint promotions with an affiliate, the utility will not undertake such efforts with competitors to the affiliate. The solution to that problem, however, is not to require the affiliate to be treated worse than its competitors. Placing the affiliated marketer at a competitive disadvantage, by making it the only marketer with which the utility cannot conduct joint sales efforts, does not promote competition. It merely favors non-affiliated competitors.

Clearly, joint sales calls and promotions should be permitted, so long as the utility is willing to take the same steps with non-affiliated marketers. Moreover, any proposed prohibition that applies to an affiliate of a utility without applying equally to other marketing companies should be considered suspect.

The purpose of retail unbundling is to provide consumers with more choice at lower prices. If codes of conduct exist, they should ensure that abusive affiliate relationships do not undermine the goals sought through this process. States must guard against attempts by marketers not affiliated with local utilities to draft codes of conduct to gain a competitive advantage by crippling marketing affiliates of utilities.

Sharon Heaton is deputy general counsel to the Columbia Gas System.

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