Fortnightly Magazine - February 15 1997

The opening of the Georgia General Assembly on Jan. 13 prompted the Georgia Public Service Commission to push for competition in the state's natural gas industry. Following a December report by the Georgia House and Senate Gas Study Committees, legislation is expected this session to open up the gas market.

That report, in effect, rejected a proposal by Atlanta Gas Light Co. to enact competition. Now AGL has a new proposal, which would transform it into a "pipes" company that no longer would sell gas to end users.

My business, the natural gas industry, stands at a crossroads. Unbundling and deregulation permeate the market. The next three years will see the end of many fixed, long-term supply and transportation service contracts (em the closing of an era.

In fact, natural gas marks perhaps the last commodity traded on a major exchange that remains captive to such long-term contracts. The demise of such contracts will add flexibility to gas pricing and supply management.

This evolution will accelerate with a host of changes in the way gas moves in wholesale markets.

To predict the Clinton Administration's next step is foolhardy. And when it comes to the first federal restructuring bill, it's riskier still to rely on drafts that apparently were leaked to gauge reactions of the energy industry and media.

"There have been a gazillion versions of the bill which have been prepared," says a Department of Energy official.

The North Carolina Utilities Commission has permitted the state's major investor-owned electric utilities to suspend their

existing avoided-cost rate offers for long-term power purchases from qualifying cogeneration facilities, pending regulatory review.

The commission said it would also review a proposal by North Carolina Power Co. to reduce the eligibility threshold for the avoided-cost rates from the current capacity level of 5,000 kilowatts, to only 100 kW.

Consumers Would Overpay.