Natural Gas Consumers Relief Act (HB 1568)

The Bill Sponsored by Governor Roy Barnes. Was signed into law on April 25, Passed by the Georgia Legislature on April 12, 2002 (House 159-3, Senate 32-14). Primary purpose is to address low-income customers and competition. More comprehensive than last years Consumer Bill of Rights legislation.

Major Changes Creation of a regulated provider. Approval for an Electric Membership Corporations (EMC) gas affiliate to seek marketer certification. Establishment of service quality standards for AGL and the marketers. Hearing set to address the assignment of interstate assets to the marketers. Strengthening and addition of consumer protections. Authorization of a surcharge for interruptible (large industrial) customers. Inclusion of temporary regulated pricing if certain conditions are met.

Regulated Provider Designed to serve two groups of customers: Group 1 - low-income, Group 2 - those refused service (credit risk). Different from previous provider of last resort (Infinite Energy) concept because low-income customers will be served at affordable price. Group 2, like the previous POLR customers, will pay a premium.

Regulated Provider Using bid process, PSC had to select one of the certified marketers by July 1, SCANA Energy was selected as the regulated provider on June 18. Will serve for two years. Able to recover from the USF a majority of bad debt for Group 1 customers only. Group 2 customers will pay much higher prices to cover risk. SCANA Energy wanted to be the regulated provider to increase market share which will help reduce operating costs.

EMC Entry In order to increase competition, an EMC, through its gas affiliate, can seek to become certified by the PSC as a gas marketer. Terms and conditions will govern the EMC/affiliate relationship. For example, EMCs are prevented from cross-subsidizing and using federal or state loans.

EMC Entry There are only four or five of the 42 EMCs that have the capacity to operate alone as a gas marketer. It is still unclear how many of the EMCs will seek certification. Walton EMC plans to file for certification in the near future.

Service Quality Standards By September 1, 2002, the PSC must develop rules to establish service standards. AGL and the marketers must adhere to the standards. Standards include meter reading, turn-ons & offs, call center response time, and daily forecasting of usage and management of interstate assets by AGL. SCANA has been asking for service standards for over a year.

Assignment of Interstate Assets By July 1, 2003, the PSC must hold a hearing to address the assignment of interstate assets by AGL to the marketers. PSC may limit the assignment to marketers qualified technically and financially. Assignment would allow SCANA more control over its assets in all three states.

Consumer Protections Strengthens the Consumer's Bill of Rights passed in Sets residential deposit limit of $150. Sets late charge of $10 or 1.5%, whichever is greater. Gives customers a three-day right of recission after establishing service. Includes numerous other billing and notification requirements.

Industrial Customer Surcharge Controversial change allowing the PSC to apply a surcharge to large industrial (interruptible) customers. Designed to recover some of AGLs system costs shifted to residential customers at the outset of deregulation. Prior to deregulation, industrials paid some $40 million. Last year, they paid approximately $8 million. The surcharge is capped at $25 million and will fund the USF which is used primarily to assist low-income customers. There are approximately 650 industrial customers subject to the surcharge. They account for over 40% of the gas usage on AGLs system each year.

Temporary Regulated Pricing If 90% of the customers in a certain delivery group are served by three or fewer marketers, a rebuttable presumption that market conditions are not competitive is established. The PSC must then make a decision whether to temporarily regulate pricing for that delivery group. There are nine delivery groups throughout the state. Currently, 94% of the market is served by the top four marketers.