Producers Strongly Support Legislation to Bring Competitive Benefits to Pennsylvania Natural Gas Consumers

NATURAL GAS SUPPLY ASSOCIATION

805 15th Street N.W., Suite 510
Washington, D.C. 20005

FOR IMMEDIATE RELEASE
DATE: April 22, 1997

CONTACT: Charlotte LeGates

PHONE:202/326-9316

FAX: 202/326-9334

Producers Strongly Support Legislation to Bring Competitive Benefits to Pennsylvania Natural Gas Consumers

Washington, DC -- Legislation now under consideration in the Pennsylvania legislature has the potential to ensure consumers of "reliable and reasonably priced natural gas," according to Bill Benham, vice president of regulatory affairs, Amoco Energy Group. Benham represented the Natural Gas Supply Association during two days of hearings this week in Harrisburg, Pa.

That potential will be realized, however, only if the marketplace encourages "new and capable suppliers to enter the market and to challenge the incumbent utilities for [consumers'] business and goodwill," Benham said. "Without competitors, there is no competition."

Given that the state's current gas distributors "start out with entrenched structural and operational advantages," including ownership of the delivery system, knowledge of the local market, and name recognition, NGSA supports the complete separation of gas distribution, which would remain regulated, from the local distribution company's (LDC's) marketing affiliate; the latter would handle all "merchant" functions that involve selling gas (the commodity) to the consumer.

NGSA also advocates regulatory structures that protect consumers from the potential abuse of market power by distributors, including:

The "unbundling" (separation) of services behind the citygate so that consumers pay only for those services they use.

"Open access" to the system of pipes that distributes gas to consumers, so that all marketers can reach potential customers.

The development of codes of conduct for distributors' marketing affiliates to ensure that locked-in ratepayers are not forced to subsidize activities that unfairly increase the affiliate's market share at the expense of other competitors.

Minimal barriers and reasonable requirements for new market entrants.

Efficient LDC service, and an efficient, effective complaint process.

Continued regulatory oversight when competition is insufficient.

Benham's testimony is available from the NGSA receptionist, 202/326-9300.

This page was last updated August 31, 1997