Over the summer, a handful of states approved gas pilot programs that will introduce choice of supplier to residential, and small commercial customers in preparation for the heating season. The decisions welcome the expansion of customer choice to smaller users, but pay careful attention to operational details such as who controls storage and upstream pipeline capacity to performance balancing services.
New Jersey. Finding greater than expected public interest, the New Jersey Board of Public Utilities has authorized New Jersey Natural Gas Co. to allow additional customers to participate in a new residential transportation pilot, allowing consumers to choose among third-party gas suppliers, after the initial allotment of 30,000 residential customers was filled nearly three months before the enrollment period was set to close. The board agreed to allow an additional three months to sign up another 5,000 customers, starting in 1998. However, the BPU slowed future enrollment, citing uncertainty about claims of price savings by marketers. Several complaints of poor conduct by utility-affiliated marketing companies also had surfaced.
The BPU attributed the early success to advertisements of energy savings by marketers, ranging from 10 to 13 percent. It cautioned, however, that several developments might affect the size of customer savings: 1) customers might face an additional charge of 4 to 5 cents per therm to cover the allocation of any reconciled gas adjustment clause costs among customers converting to transportation service, and 2) newly adopted changes to the state's gross receipts tax law would likely remove any tax advantage currently given to third-party suppliers. Re New Jersey Natural Gas Co., Docket No. GT96070524, July 7, 1997 (N.J.B.P.U.).