Media advisory [Jan. 10, 1997]

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, MEDIAADVISORY. GEORGIA PUBLIC SERVICE COMMISSION

FOR IMMEDIATE RELEASE January 10, 1997

CONTACT: Shawn Davis Public Relations Specialist (404) 656-6558 or 1-800-282-5813

GAS LEGISLATION SHOULD FOSTER TRUE COMPETITION SAYS PSC

ATLANTA -When the General Assembly convenes Monday, the Georgia Public Service Commission (PSC) will advocate a legislative approach that results in true competition in the gas industry benefiting all residential and business customers.

Legislation is expected to be enacted this session opening the gas market to competition following a report issued in December by the Georgia House and Senate Gas Study Committees. The formation of the study committees last session effectively tabled proposals by Atlanta Gas Light Company (AGL) in favor of studying a more safe, reliable transition to competition.

AGL, serving 1.3 million customers in Georgia, has devised a new plan this session the PSC believes is problematic and may not provide a clear benefit to residential and small business customers, according to an information bulletin issued today by the PSC. Essentially, the AGL plan would transform the utility into a "pipes" company which would no longer directly sell gas to end users. AGL would instead sell pipeline capacity to qualifying marketers who would in turn sell gas to residential, commercial and industrial customers. The marketers would acquire pipeline capacity from AGL based on their ability to secure market share. AGL will continue to operate its affiliated unregulated marketer, The Energy Spring, Inc., which would compete for market share. Under the AGL plan, true competition would be defined as non-utility marketers holding 18% or better of the market and the market would then be fully deregulated.

While the PSC is in favor of opening the gas market to competition, the agency believes that AGL's rush to full deregulation by July 1, 1997, without demonstrating clear benefits to consumers, is unreasonable and may only result in creating an unregulated monopoly. The PSC is advocating a step-by-step approach which phases different consumer classes into competition as the market develops into effective and beneficial competition.

"There is no emergency in the gas industry that demands that we place consumers at risk. Our approach protects the ratepayer and ensures a safe transition to lower pricing and better service," said Commissioner Stan Wise who served on the gas study committees.

Last month the Georgia House and Senate Gas Study Committees concluded five joint hearings and

issued a report on their findings. The report acknowledges Atlanta Gas Light's claim that industrial

customers pay lower rates than residential and small business customers. While it is true that residential

users pay about 4.5 times more for gas service than industrial customers, industrial customers are

subject to having their gas service cut off on the coldest days of the year, use higher volumes, and have

more competitive fuel alternatives. Over the past thirteen years residential rates have gone up 13%, or 1%

per year. Factoring in inflation, the PSC argues, Georgians are paying less for natural gas now than they

did in 1983.

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