Retail Unbundling - Kentucky


Status: The state has a pilot unbundling program for residential customers.


Overview: In January 2000, the Kentucky Public Service Commission (PSC) approved a pilot customer choice program for residential and small-volume commercial customers of Columbia Gas of Kentucky. The 3-year program, "Columbia Customer Choice," began on September 2000 and is available to all Columbia customers who consume less than 25 million cubic feet of natural gas per year. As of June 2002, about 45,570 of the company’s 126,000 residential customers were participating. Columbia continues as the supplier of last resort and remains in the merchant business, both selling and transporting natural gas to consumers. Columbia must file an annual report each year that provides data on customer participation and related volumes, customer education programs, marketer participation, and stranded costs. The company is to complete its evaluation of the choice program by the date of its next annual customer choice report, which is due on June 1, 2003, and indicate whether it intends to continue the program.


On January 13, 2002, the PSC approved an agreement wherein marketers participating in Columbia’s choice program will “take assignment of minimum levels of the utility’s storage and transportation capacity and undergo a prospective capacity audit.” If a marketer does not meet its capacity requirements, the utility may assign capacity to meet the shortfall. According to Columbia’s most recent report (June 2002), three marketers were participating in the pilot program, with one marketer serving 80 percent of the choice participants. As of December 2002, only two marketers were actively adding new customers. Larger volume customers throughout the state have had access to unbundled service since the 1980s.


EIA State Data: In 2001, Kentucky had 749,108 residential and 81,795 commercial customers. They consumed 66 and 39 billion cubic feet of natural gas, respectively. The average prices paid for natural gas purchased from local distribution companies by residential and commercial customers were $9.54 and $9.20 per thousand cubic feet, respectively. The average city gate price in Kentucky was $6.32 per thousand cubic feet.



Eligibility/Participation in Retail Choice Programs:


Status as of June 2002: Number of Customers

Customer Type

Total 2001

Eligible

Participating

Total

Percent of 2001 Total

Total

Percent of Eligible

Percent of 2001 Total

Residential

749,106

126,000

16.8

   45,570

36.2

6.1

Commercial

 81,795

 14,000

17.1

 5,264

37.6

6.4

Total

830,901

140,000

16.8

50,834

36.3

 6.1


Sources: Total 2001: Energy Information Administration, Natural Gas Annual 2001 (February 2003). Eligibility Rate: Based on customer totals for Columbia Gas of Kentucky reported on Form EIA-176, "Annual Report of Natural and Supplemental Gas Supply and Disposition," which is the primary data source for EIA's Natural Gas Annual. Participation Rates: Kentucky Public Service Commission.


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File last modified: 1/31/2003