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GNG Announces Special Fixed Rate Plan 10/9

Natural Gas Marketer Slapped with Largest PSC Assesment Ever 9/5

Regulators Approve Fuel Costs, Consumers Pay All plus Interest 8/22

GA Gas Company Must Contribute to LIHEAP 7/14

GNG Announces Special Fixed Rate Plan

(October 9) Georgia consumers concerned about potentially high natural gas bills this winter should take note: Georgia Natural Gas (GNG) is offering a special fixed rate of 74.9 cents per therm for customers signing up for GNG's 12-Month Fixed Rate Plan during October. In addition, GNG's variable market price for October is 74.9 cents per therm, a 9 percent decrease from a month ago, and the lowest market price currently available.

Domestic natural gas storage reports have been very strong during the past month, increasing the likelihood that the five-year average of working natural gas inventories can be achieved by the traditional opening of the winter heating season on November 1. This put downward pressure on national wholesale natural gas prices for October, contributing to GNG reducing its prices.

Although natural gas storage reports have been encouraging throughout the summer and early fall, storage inventories can be quickly depleted as a result of unusually cold temperatures. That was the case last winter when natural gas inventories were significantly diminished from a long and colder-than-normal winter, raising prices that are still above historical levels. Natural gas pricing has been impacted nationwide in both regulated and deregulated markets.

Source: PR Newswire

Natural Gas Marketer Slapped with Largest PSC Assesment Ever

(September 5) On September 2, the Georgia Public Service Commission (Commission) approved in a 3 to 2 vote the largest assesment ever against a natural gas marketer in order to resolve 138 allegations of slamming against Energy America.  Slamming is the switching of a consumer's natural gas marketer without the consumer's authorization. 

The settlement would require the company to contribute $400,000 to the Low Income Heat Energy Assistance Program (LIHEAP) plus $100 credits to each of the 138 customers slammed for a total payment of $413,800. In addition, Energy America would pay $5 to these customers for each day it took the gas marketer to return the customers to their preferred provider after being slammed. The company would also have 15 days to credit accounts of additional customers identified as being slammed.

The Commission approved an amendment that would prevent the company from receiving a tax benefit from its LIHEAP contribution. Commissioner David Burgess noted that customers would receive free gas during the time they were switched from their preferred provider.

To prevent similar problems, the settlement requires the company to develop and deliver training on Commission natural gas rules to its employees and agents, and, for the next two years, to submit all proposed direct mail, email, television or billboard advertising to the Commission for its review.

Energy America is also prohibited from engaging in activities to sign up new or former customers for a 12-month period without prior Commission approval.
   
In May and August 2003, the Commission held hearings on slamming allegations against Energy America, a subsidiary of Centrica (a Canadian/UK company with over 6 million customers in Europe and North America).

The Commission initiated this case when 14 consumers filed complaints after being contacted during the summer and fall of 2002 by a telemarketing firm hired by Energy America. The Commission found that Energy America had engaged in 138 instances of alleged "slamming," the unauthorized switching of customers'preferred natural gas providers, and other alleged violations of Commission rules. These unauthorized switches occurred even though Energy America had been sanctioned by this Commission in 2000 for unauthorized switching violations related to a door-to-door sales campaign.

Source: Georgia Public Service Commission

Regulators Approve Fuel Costs, Consumers Pay All Plus Interest

(August 22) On August 19, the Georgia Public Service Commission (PSC) approved an agreement allowing Georgia Power to recoup more than $150 million in fuel costs.

Included in the deal is a provision allowing the company to recover $6.3 million it spent to buy natural gas last fall -- when an employee's mistake put its Plant Vogtle nuclear reactor out of commission for 24 days.

The fuel agreement came after months of contentious debate between the utility, lobbyists for large electric users and the PSC staff. The staff originally proposed ordering Georgia Power to eat the Plant Vogtle-related fuel costs, saying that they were the result of "clearly imprudent" actions by the company.

The agreement, approved by a 3-2 vote, also includes:

About $20 million in interest, which is a return of 13 percent on the company's uncollected fuel costs.

That rate was set by the PSC in the company's last rate settlement in December 2001.

A provision that reduces that interest rate to 1.5 percent in the future.

A new two-tiered cost-recovery structure that will make kilowatts more expensive in the summer than during the rest of the year.

The outage at Plant Vogtle began shortly before Thanksgiving when a technician sent to fetch a corrosion-preventing chemical to put inside the reactor came back with a corrosive chemical instead. In calling the action imprudent, the staff cited a Nuclear Regulatory Commission report that blamed management for failing to train the employee to discriminate between nearly identical chemical containers.

The staff also originally opposed the two-tiered fuel-cost pass-through formula, because of its disproportionate effect on smaller ratepayers.

Pushed by the large industrial users, the structure reflects the fact that utilities pay more for fuel during peak demand times. It means utilities will recoup those costs when they happen.

The structure affects residential ratepayers more because their increased summer electricity use is proportionally higher than large users' summer increase.

The PSC estimates that the fuel charge on small ratepayers' bills will be $3 higher per month next summer because of the change, and about 37 cents less per month the rest of the year.

The staff reversed itself on most of its recommendations late last week, in exchange for Georgia Power's agreement to accept the reduction in the interest it earns on uncollected fuel costs.

In comments before the vote, Commissioners Everett and Burgess both said that concession should not be underestimated. The change in interest rate will save ratepayers $9 million over the next 18 months, Burgess said. He also invoked last week's power grid meltdown in the Northeast as a reason to approve the agreement: "We've seen the results of what can happen when utilities fail to invest."

Source: The Atlanta Journal-Constitution

GA Gas Company Must Contribute to LIHEAP

(July 14)  The Georgia Public Service Commission in early July approved an agreement that requires Southern Company Gas to contribute $100,000 to the Georgia LIHEAP in order to resolve allegations that the company violated state and commission laws.

Southern Company Gas, the No. 3 gas marketer in the state, was accused of sending notices to customers threatening to disconnect their service with less than the required 15-day notice. The company also allegedly required customers to pay their entire bill rather than simply the amount past due.

Under the agreement, Southern Company Gas is required to credit $45,000 to customers' accounts and contribute $100,000 to LIHEAP.

Source: Georgia Public Service Commission

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