Gas Choice

What is Natural Gas Deregulation?

Deregulation is the process of lessening the amount of government restrictions placed on industries and oversight applied to private companies. Public utilities, such as natural gas, electricity, water, and telephone are vital to the public and are often operated as a natural monopoly subject to government regulation. As a general rule, CITIZEN POWER does not support deregulating or privatizing vital services.

For the past ten years, the natural gas industry has gradually deregulated for large industrial and commercial customers. In 1995, residential and small business markets in a few states began benefiting from natural gas choice pilot programs. These programs flourished and expanded to 17 states by 1997. States with successful pilot programs began enacting deregulation laws to incite competition.

Why Deregulate?

The rationale behind natural gas deregulation is to create more choices and competition, thus driving down natural gas prices while spurring innovation. Natural gas choice programs may bring competitive prices and new service offerings just as the deregulation of banking, telecommunications, airlines, and railroads have lowered prices and increased product options. Retail natural gas choice allows you the freedom and ability to buy your natural gas from a company that best meets your needs, offering you the most for your money. The actual amount of your savings will vary depending upon the natural gas supplier you select, the amount of natural gas you use, the price of natural gas in the future, and the current regulated cost of natural gas supply purchased by your local natural gas company.

Unbundling of Services

The three major components in natural gas supply are: the extraction of natural gas from the ground (or natural gas production), the interstate delivery of gas into a region by pipeline, and the transportation of gas to your home. Before deregulation, the natural gas company that transported the gas to the consumer's home provided all three services and charged one price. With deregulation, the components are unbundled, allowing consumers the option to purchase the natural gas from a natural gas supplier rather than purchasing the natural gas from their natural gas company.

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OHIO GAS CHOICE
The state has partially implemented customer choice for its residential and small business customers.

Retail unbundling by the major gas utilities in Ohio is being implemented through Ohio Public Utilities Commission orders and stipulations with each individual company. Unbundled service in the residential and small commercial sectors began with a pilot program for Columbia Gas of Ohio customers in April 1997. Pilot programs for Cincinnati Gas & Electric and East Ohio Gas began in late 1997. In June 1998, the Commission allowed the Columbia Gas and Cincinnati Gas & Electric programs to expand to include all customers in their service territories. As of June 21, 2000, the East Ohio Gas Energy Choice program was expanded system-wide. There are no current plans to establish a program for Dayton Power & Light pending the sale of its gas operations.

Click here for information about your gas choice options in Ohio.

PENNSYLVANIA GAS CHOICE
The state has partially implemented customer choice for its residential and small business customers.

In June 1999, Governor Tom Ridge signed into law the Natural Gas Choice and Competition Act that mandated natural gas choice to all customers on November 1, 1999. The bill eliminates the state's 5 percent gross receipts tax on gas service beginning January 1, 2000. In addition, the bill provides protections for low-income consumers and requires all natural gas suppliers in the competitive market be licensed by the Pennsylvania Public Utility Commission (PPUC).

Prior to the passage of the Natural Gas Choice and Competition Act, some natural gas utilities in the state had already implemented retail pilot programs for residential customers to choose their natural gas supplier. With the passage of the Act, gas utilities with annual gas operating revenues of $6 million or greater were required to submit deregulation plans to the PPUC to expand choice to all residential customers.

Click here for information about your gas choice options in Pennsylvania.

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