Retail Unbundling - Iowa


Status: The state has no unbundled services for residential customers but is considering action. .


Overview: Iowa has been considering customer choice options for many years. In October 1997, the Iowa Utility Board adopted rules that gave utilities the option to file tariffs to implement unbundled service to small customers, including residential customers. All utilities in the state filed plans in late 1998, but the plans were quite diverse. Several workshops were conducted, but there was still disagreement among utilities, marketers, and consumer advocates as to how to proceed. In March 2000, the board dismissed the unbundling plans, determining that they either moved too slowly or too quickly in opening the residential market to competition. Instead, the board ordered each utility to propose tariff changes that "remove the primary barriers to providing a competitive option for small-volume customers interested in transporting gas." In its order, the board also noted that some of the issues raised during the workshop process might need to be resolved through legislation. All the utilities filed new unbundling draft tariffs in November 2000, which are still under review by the utility board.


In February 2001, the Board adopted rules for certifying marketers. Applicants must demonstrate operational and financial capability to deliver services and file financial statements. Certified marketers must file an annual report giving the number of small and large customers served each month, total sales to small- and large-volume users, and revenues collected. Marketers must file rates each month for each customer class. Marketers that already serve large-volume customers in the state also need to be certified under the new rules and also can apply to serve small-volume customers as well. Application processing began in April 2001. As of December 2002, five marketers, including the Joint Utility Management Program which provides gas aggregation service to participating school boards, are certified to provide service to small-volume users. The school board aggregation program began in 1997 as a pilot project.


EIA State Data: In 2001, Iowa had 818,313 residential and 95,495 commercial customers who consumed 71 and 46 billion cubic feet (Bcf) of natural gas, respectively. The average prices paid for natural gas purchased from local distribution companies (LDCs) by residential and commercial customers were $8.90 and $7.24 per thousand cubic feet, respectively. The average city gate price in the state was $5.92 per thousand cubic feet.

Iowa: Legislative and Regulatory Actions on Retail Unbundling


Summary: Several regulatory changes have been made in anticipation of unbundling gas service to residential customers.


Regulatory and Legislative Actions

Regulatory Actions

10/01

Board certified eight marketers, including the Iowa Joint Utility Management Program which operates an aggregation program for Iowa school boards. Program operated as a pilot for the past 4 years.


 

7/01

Nicor Energy marketer application approved (Docket No. CGP-01-2).


 

2/01

Rules adopted for certifying marketers (RMU-00-7). Applicant must demonstrate operational and financial capability to deliver services and file financial statements. Board will issue decision within 90 days of application unless it needs another 60 days. Application processing scheduled to begin April 25. Certified marketers must file an annual report giving the number of small and large customers served each month, total sales to small- and large-volume users, and revenues collected from both small and large customers. Marketers must file rates each month for each customer class.


 

11/00

Utilities filed new draft tariffs to unbundle services. Expected to be in place in the spring of 2002.


 

3/00

Board dismissed utilities' unbundling plans. Instead, the board ordered each utility to propose tariff changes that "remove the primary barriers to providing a competitive option for small-volume customers interested in transporting gas," and requested comments within 30 days regarding the procedural steps for designing these tariffs. In its order, the board also noted that some of the issues raised during the workshop process may need to be resolved through legislation.


 

12/98

Board authorized a workshop process for development of competitive markets (Docket NOI-98-3). In order to reach more uniformity, the utility board authorized a workshop process that would bring together utilities, marketers, and consumer advocates to discuss issues related to creating a competitive market. Five workshops were conducted between January and mid-April 1999, with parties agreeing on the concepts of regulation of gas delivery services, the obligation to serve, and the need for educating consumers. However, there was still disagreement as to how to proceed, with some advocating a legislative approach, others proposing aggregation programs, and others proposing quite diverse alternatives  

 

10/97

New rules adopted (Docket No. RMU-96-12 )that allow utilities to file tariffs to implement unbundled service to small customers, including residential customers.



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File last modified: 01/31/2003