Press Release

Company First to Fully Participate in Competitive Natural Gas Market

    HARRISBURG, Pa. - The Pennsylvania Public Utility Commission (PUC) today finalized the restructuring settlement of Columbia Gas of Pennsylvania, making the company the first to fully meet the requirements of the Natural Gas Choice and Competition Act.

    The settlement moves Columbia's highly successful pilot project to a permanent statewide program, enabling all customers to choose their natural gas supplier. To date, Columbia's Choice program has attracted approximately 110,400 participants out of its 380,000 Pennsylvania customers.

    "The Columbia Gas pilot program has been a model for both Pennsylvania and the nation," said PUC Chairman John M. Quain. "We are pleased that the program is now permanently open to all of the company's customers. Our goal now is to complete the additional restructuring cases so that the benefits of natural gas competition can be extended to all gas customers throughout the state."

    Other provisions of the restructuring settlement include:

• Allowing the program to begin at the beginning of winter when gas usage is greatest and customers can benefit most from gas supply choices.
• Extending Columbia’s Customer Assistance Program (CAP) 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.
• Establishing 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.
• Launching a comprehensive consumer education program, which will include a redesigned bill that will provide customers easy to understand price to compare information.
• Permitting Columbia to offer capacity choices to natural gas suppliers. This is an important degree of flexibility in allowing suppliers to craft deals for potential customers.
• Enabling customers to enroll through the telephone, over the Internet and in writing.
• Continuing Columbia's obligation as the supplier of last resort.

    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.

    After today's vote, Chairman Quain thanked the parties for their efforts in reaching a timely settlement. "Today's action demonstrates the significant progress that can be achieved through consensus building," he said. "It is our hope that we can extend this cooperation to the remaining restructuring cases and bring similar benefits to all Pennsylvania customers."

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

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