Set-rate clients for gas fare best

Set-rate clients for gas fare best

Web posted Monday, July 21, 2003
By Dave Williams | Morris News Service

ATLANTA - Georgia natural-gas customers who chose fixed-rate billing last winter saved hundreds of dollars by avoiding huge price spikes, utility regulators and executives say.

But it will take a combination of additional supplies and aggressive conservation measures to protect all gas customers from what has become a highly volatile market. U.S. Energy Secretary Spencer Abraham said during a forum on natural gas last week.

"This isn't just a problem about numbers and statistics," Mr. Abraham told an audience of more than 60 government officials, utility executives and environmental advocates at the Southface Energy Institute. "It's about real people and the real problems they confront when prices soar."

Natural-gas prices have increased tremendously in Georgia since the General Assembly deregulated the industry in 1997. An outcry from gas customers prompted the General Assembly to pass legislation last year containing protections for low-income customers.

Still, average natural-gas prices in Georgia last winter were $240 higher than during the winter of 2001-02, according to the federal Energy Information Administration.

Customers who locked in their costs by choosing fixed-rate billing were better able to insulate themselves from those increases. As part of deregulation, Georgia natural-gas companies allow customers to select fixed or variable rates.

"Many customers were able to benefit from an informed choice," said Stan Wise, a member of the state Public Service Commission, which regulates utilities.

The Atlanta forum, and three others to follow across the country, are part of the Department of Energy's effort to look for solutions to the natural gas shortages facing the nation.

Mr. Abraham said current stocks are unusually low because of a combination of last winter's cold weather in parts of the country and declines in both domestic production and imports.

He said the resulting price increases are affecting Americans in many ways, from seniors on fixed incomes to industries that heavily depend on natural gas.

Utility executives in the audience agreed that America can't conserve its way out of the problem. They called for the federal government to do more to encourage gas companies to increase production, starting with stabilizing prices.

"It's hard to make an investment when in 10 months, you can have the price go from $10 to $1.80," said Arthur Corbin, the president and general manager of the Municipal Electric Authority of Georgia, a consortium of city-owned utilities.

But Mr. Abraham said stepped-up energy conservation also has a key role to play. He said part of the reason he chose Southface - which specializes in energy-efficient homebuilding - for Friday's forum was to emphasize the conservation aspects of his message.

Two weeks ago, the DOE launched an education campaign aimed at making homeowners and businesses more aware of the benefits of energy efficiency.

"There are hundreds of ways for consumers to save energy," Mr. Abraham said. "If everyone does just a few things - the overall savings can make a huge difference for our economy."

But Jim Presswood, a staff attorney for the Southern Alliance for Clean Energy, said Southeastern states are lagging behind the rest of the country in committing to conservation. He cited a recent report that ranked Georgia 40th in per-capita spending on energy efficiency.

"There's a lot of investment going into supply, but very little going into energy efficiency," he said. Mr. Presswood urged Mr. Abraham to work to correct that imbalance.

Reach Dave Williams at (404) 681-1701 or davemns@mindspring.com.

-From the Tuesday, July 22, 2003 printed edition of the Augusta Chronicle