Monopolies

Remember all that efficiency, etc. that gas deregulation was supposed to bring?

I was talking to a friend yesterday who forgot to pay his gas bill and his gas got turned off. Now, in fairness, the gas company sends plenty of notices, but they got missed.

Anyway, he just assumed the gas company, like the water company, cable company, etc. could just come out and turn the gas back on. Nope. It took four days. Only one company can turn back on the gas.

Seems like somebody should have considered that in all the deregulation hoopla from a few years ago.

This raises a larger issue too — was gas deregulation really worth it in the state and is it a model for the future?

15 comments

  1. Progressive Dem says:

    Gas dereg happened before Richardson came to power. A certain Democratic senator from Bonaire was the champion and sponsor. Meanwhile Georgia Power is about to push our rates up $10 per month while the PSC rolls over and says scratch me.

  2. Debra says:

    Yep, good ole Purdue was the driving force behind gas dereg. My gas bill before dereg was about 20.00 per month. After dereg, it went to about 50.00 to 80.00 per month. All that happened was a lot of company’s started a paperwork mill and gas costumers got screwed. I purchased all new electric appliances and electric water heater and have not regretted it for one minute. This better not be Georgia’s future or I’ll be moving!

  3. Two things, one they happened to do deregulation at a bad time:
    http://www.eia.doe.gov/dnav/ng/hist/n3010us3a.htm

    Prices were about to skyrocket whether they stayed regulated or not.

    But the real reason they did de-regulation was that large corporate users were threatening AGL that they would build their own private pipelines into the state or otherwise get the resource here and cut out AGL.

    SO…along came Sonny (and pretty much everyone else in the legislature) and they cut a sweetheart deal with large corporate users – they would no longer charge them the line maintenance fee, that would be shifted entirely to consumers. This is huge monthly fee you pay whether you use any gas or not on your bill.

    The logic behind this is that since residential and small businesses are what’s called non-interruptible users (they can’t get their service shut off when there’s a spike in demand) they should pay some sort of extra premium for it. Meanwhile, huge factories etc are theoretically interruptible users – they pay less because on a high demand day their service can simply be cut off until demand cools down.

    Now the question to ask would be this – do you think these so called interruptible users have EVER had that happen to them? I don’t.

    • B Balz says:

      I truly despise gas deregulation, and want to add one more point to Chris’s excellent recap on one of the biggest residential consumer ripoffs that ever occurred.

      The other constituency that wanted gas deregulation: Environmentalists.

      They HATE fossil fuel sources, and are not thrilled with NUKE-lar, either. Talk about strange bedfellows, the Large User Groups, unwittingly, partnering with tree-huggers. Clean burning natural gas is a friend to the environment, so they are for it. Green has consequences.

      Finally, this was during the Reagan years and all the rage was deregulation. Leads to competition they say. Hoohockey, I hate having to shop for gas providers, what a load of
      therms.

      Some believe this is the reason the man from Bonaire got to send out ‘thank-you’ cards from West Paces Ferry Road….

      • iLarynx says:

        Care to provide any more specifics about which particular groups – perhaps actual names beyond “tree huggers” – who were promoting deregulation of Georgia’s natural gas system? Until then, I’ll file this in the Dubious/BS category.

  4. ChuckEaton says:

    AGL controls and owns the infastructure. The belief is one company should be held accountable, from a capacity and a safety standpoint, for the network.

    We are debating “turn-on” times in the current AGL rate case. The company has X number of service people versus Y number of requests. There is a balance, you don’t want to have too many employees on-call, to turn-on someone’s home, who hasn’t paid their gas bill, at a moment’s notice, since you would obviously need a large buffer to accomplish it. It comes down to asking how much should current ratepayers contribute to this program. I will agree the 4-5 days it’s currently taking is too long.

    AGL wants to hire more people, which will in turn reduce the “turn-on” times. SCANA has intervened in the rate case to discuss this very point. The marketers support more hires at AGL, because they are sick of taking the heat from people like your friend. The consumer groups seem to oppose it as it will lead to higher rates.

    When we get into winter it really becomes a problem, but you do have problems smoothing the workforce out over the entire year.

    Currently, the commodity price for gas is at historic lows, so an average gas bill is much lower than it was a few years ago. For the time being, gas appliances are probably cheaper than electric appliances, but you’re a slave to the commodity price of gas. With electric, you have more diversification of fuel sources, such as nuclear, to smooth-out individual spikes of fuel.

    • ChuckEaton says:

      I wrote the previous post fairly quickly and want to clarify my comment on gas appliances versus electric appliances. Gas is currently cheaper, and probably more efficient versus burning natural gas at an electric plant and losing some of the power during line loss, etc.., but electric gives you more diversification of fuel.

      I don’t have a crystal ball, so it’s hard to know what the fuel costs will be in the future. The current forecast is low natural prices, due to new technologies that have allowed the US to tap into its enormous shale reserves. My primary fear, on the natural gas front, is that electric companies will increase their use of natural gas, due to it’s cheap commodity price, the fact combined cycle power plants are relatively cheap to build and its relative environmental favorability; which will drive the price of natural gas up.

      • Lady Thinker says:

        I agree with your post but one of the negatives about gas heat is when the power goes out, the heat doesn’t always come on. Gas will work on most stoves during a power outage though and that is a good thing.

  5. Scott65 says:

    The PSC is the often overlooked agency when voters go to the polls. Of all the elected officials we vote for, these people can make decisions that affect our wallets directly, yet nobody pays any attention. This agency has been nothing more than a front for corporate interests since Angela Speirs chose not to run for re-election. The Stan Wise types have no love for the consumers they are supposed to protect. They only are concerned with the cash and perks delivered by the utilities they regulate (who it seems regulate them)

    • macho says:

      Baker is a much better Commissioner. Speir was a huge liberal that was constantly voting for welfare programs. The AJC loved her. She left the PSC to go lobby for the Roy Barnes / trial lawyer mouthpiece – GA Watch.

  6. This is just another example that even though people keep saying gas “deregulation”…. true deregulation never really accured…. “bottlenecking” would be a better term used for what actually accured.

    We, the LP, warned that what was being done was not actual deregulation and was destined to make a bad problem worse…. maybe that was the intent all along… to make “deregulation” a bad word.

    just saying.

  7. dodworld says:

    “Just saying” devalues your statements. Deregulation is a bad word for it is now interchangeable with highway robbery and greed. Remember what happened in California during the energy deregulation we can only expect the same from these people. It is a sad state that we don’t want to provide for our country and keep our people fed and warm.

    Joshua Leach
    Blood Analysis

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