Press Release

PUC Approves Interim Restructuring Settlement with Columbia Gas

Published on 11/10/1999

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    HARRISBURG, Pa. - By a unanimous vote, the Pennsylvania Public Utility Commission (PUC) today approved an interim settlement agreement that will substantially restructure Columbia Gas Company of Pennsylvania and begin to open the retail natural gas market for customer choice and competition.

    The settlement, reached among Columbia and 20 parties, is a major step in implementing the recently enacted Natural Gas Choice and Competition Act. In addition to approving the proposed settlement at today's public meeting, the PUC provisionally granted supplier licenses to 30 natural gas marketers and suppliers.

    "Columbia was a major participant in the consensus-building process that led to the passage of the Natural Gas Choice and Competition Act," said PUC Chairman John M. Quain. "Columbia’s natural gas customer choice pilot program, which pre-dated the Act, has been a model both for Pennsylvania and the nation. We are very pleased with the cooperative effort of all parties that led to the settlement before us today."

    Parties to the settlement include natural gas distribution companies, the Office of Consumer Advocate and Office of Small Business Advocate, customers and natural gas suppliers and marketers.

    Provisions of the settlement include:

• Columbia’s Choice Program will be expanded beginning Nov. 1, 1999, to include all customers.
• The settlement allows Columbia to continue the option to further offer 11 natural gas suppliers assignment of Columbia’s firm, interstate transmission capacity or to utilize acceptable alternate firm interstate transportation capacity. This is an important degree of flexibility in allowing suppliers to craft deals for 100,000 potential customers.
• Columbia’s Customer Assistance Program (CAP) will be extended beyond its Oct. 31, 1999, expiration date to the end of 2003. This will expand the potential enrollment from 1,000 customers to a target of 22,000 customers, allowing qualified low-income participants to make reduced payment for natural gas.
• The settlement establishes a cap of 4 cents per thousand cubic feet (Mcf), the standard measurement for pricing natural gas. The cap is in addition to the elimination of the gross receipts tax. It is expected that the cap will provide a substantial degree of rate stability for the 1999-2000 winter heating season.

    Quain also noted that Columbia was one of the first Pennsylvania local distribution companies to come forward with a restructuring plan that would allow customer choice under the new law.

    "I commend and congratulate all of the parties for their extraordinary effort and vision in promptly offering the Commission this settlement," he said. "The parties have effectively jump-started customer choice, moving to implement the benefits of the Natural Gas Choice and Competition Act. This demonstrates the significant progress that can be achieved through consensus building."

    Under the natural gas competition law, consumers will be able to choose the company that supplies their natural gas beginning Nov. 1, 1999.

    For additional press releases or more information about the PUC, visit our website at http://puc.paonline.com.

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