Gas Unbundling: Benefits "Uncertain" for Small Customers

Fortnightly Magazine - August 1996
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The Georgia Public Service Commission (PSC) has adopted a set of policy guidelines to restructure and promote competition in local gas markets. The PSC said that a major problem is determining how smaller core customers can benefit: "Reliance on competitive market forces is preferable to regulation," but only when competition is effective and sustainable. To test for competition, the PSC will monitor: 1) the ability of providers to make functionally equivalent service readily available, and 2) the numbers and market strength of competitive providers. To protect core customers, the PSC will assign transition costs to those who benefit by encouraging the assignment of existing supply and capacity contracts, charging exit fees to departing customers, and other appropriate means.

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The PSC directed LDCs to investigate: 1) unbundling existing interruptible sales service tariffs for large industrial and commercial customers, 2) initiating a firm transportation service rate for large customers, 3) and piloting unbundling programs for small core sales customers. It also directed its staff to develop standards of conduct for transactions between the LDCs and their gas marketing affiliates before the LDCs are permitted to compete in an open market.

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