DEREGULATION
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THE DEREGULATION OF THE NATURAL GAS INDUSTRY AND OTHER UTILITIES

   Some suppliers do not guarantee reimbursement to the end-user for penalties charged by the LDC for non-delivery, under-delivery, or over-delivery of gas.  The majority of companies that do guarantee reimbursement of penalties insert a force-majeure clause in the agreement with the end-user which many suppliers use arbitrarily for any reason whatsoever and eventually the end-user pays the penalty price.

   The cost of gas is not everything. It is imperative that an end-user selects the supplier that can provide a guaranteed uninterruptible supply of gas, delivering 100% of the customers usage at no additional cost, strong supply sources, program management (applying the rate that saves the maximum to the customer), utility management and other varied energy savings services. If your supplier pays your local utility bill, a copy must be sent to the customer.

   Pipeline capacity throughout the United States varies substantially. It is of utmost importance for the end-user to determine whether his supplier, or proposed supplier, has had any curtailments of gas deliveries in order to assess how to handle the deliveries of gas and what program to select with the local LDC. In order for the end-user to assure an uninterrupted supply of transportation gas, the end-user may elect to procure firm transportation gas from itsí supplier. This increases the cost, but guarantees the flow of gas.

   In selecting your gas supply company you should verify the supplierís past performance, financial capabilities, and determine if your supplier will confront the local LDC and/or the utility commission on your behalf in case of unjustified fees or charges, delays in implementations of programs, MDQ (maximum daily quantity allowed to be delivered daily) errors, unauthorized use, excess use penalties, wrong program billing, errors in delivery credits, etc. Check if the supplier is currently operating on the cutting edge of the latest technology available to the industry and can respond promptly to tariff changes and new innovations.

 

   Many end-users fail to compute the various charges that the LDCís add to their gas bill for deliveries. They assume that the cost of the gas by the supplier is the sole cost, while if you add the various charges by the LDC associated with transportation gas, youíll find out that the cost is higher then originally perceived. (To prevent potential losses, have your supplier guarantee annual savings in writing versus total payments to your local utility company.)

  In setting up the account on the transportation gas program, it is important to analyze the best and most economic way to install the phone lines for the meters, institute economic pooling charges, and group accounts in order to minimize costs.

  In 1997, new tariffs were implemented by the LDCís to allow small volume commercial customers to procure gas on the spot market. Some tariffs had been set to start flowing spot market gas to private residences in the spring of 2000. (The savings are minimal if any.)

  The trend is to eventually trasform your local gas utility company to serve only as a gas delivery company, rather than procure gas on the consumerís behalf. In October 1999, the State of Georgia required any customer who requested gas supply to find a gas supply company, and then the local gas company would deliver the gas.

  Be advised that as cost of energy (e.g. oil) increases so will the cost of natural gas.

  Also, hedging does not guarantee savings; it protects the consumer from paying a higher price.

  Currently, additional pipelines are being constructed which will bring additional capacity. This additional capacity has already reduced the cost of gas delivery.

  Deregulation has also come to the electric utility industry. As of the Summer of 1997, Rhode Island and New Hampshire deregulated electric utilities. California approved the transportation of electricity to end-users as of April 1, 1998. 

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