Retail Unbundling - Wyoming


Status: Wyoming has one pilot customer choice program for residential customers.


Overview: Wyoming's residential choice program ("Choice Gas"), which was set up by KN Energy (now doing business as Kinder Morgan) and approved by the Wyoming Public Service Commission (PSC), is in its eighth year of operation. The program originally allowed residential and small commercial customers in 10 eastern Wyoming communities (Torrington division) to choose their natural gas suppliers. In 2002, the program was expanded to include customers in Kinder Morgan’s Casper and Gillette rate service areas as well, thus extending choice to all of Kinder Morgan’s natural gas customers in Wyoming. The PSC also approved a regulated rate option for the choice gas program in the Casper and Gillette divisions. Subsequently, Torrington customers complained about not having the option of a regulated rate, particularly since it was less than the prices being offered by the third-party suppliers at the time. As a result, the PSC initiated an investigation into all aspects of the Wyoming choice program and conducted a series of public meetings in early 2003.


In March 2003, the PSC concluded that Kinder Morgan’s choice program was in the public interest and could continue, but with some modifications. The PSC ordered that the regulated rate, which is to be renamed the “pass-on rate (regulated rate),” should be an option for all Kinder Morgan customers and be the default rate for customers who make no selection. It also decided that the $1 customer charge associated with the choice program cannot be charged to customers who choose the pass-on rate because they receive no benefits from the charge. Supplier information is to be available to customers via toll free telephone and through the Internet, and all customers are to be informed about the availability of budget billing regardless of their service choice. Kinder Morgan was also directed to clarify the distinction between its regulated distribution company and its marketing affiliate that supplies gas under the choice program. Five suppliers besides the utility are participating in this year’s choice program that began on June 1, 2003, and runs through May 2004. About 44 percent of KM’s customers have chosen the utility’s pass-on rate, while 30 percent are enrolled with Kinder Morgan’s marketing division.


EIA State Data: In 2002, Wyoming had 182,621 residential and 23,181 commercial customers. They consumed 13 and 11 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 $5.84 and $5.03 per thousand cubic feet, respectively.


Eligibility/Participation in Retail Choice Programs:


Status as of December 2003: Number of Customers


Customer Type

Total 2002

Eligible

Participating

Total

Percent of 2002 Total

Total

Percent of Eligible

Percent of 2002 Total

Residential

182,621

   60,252

32.6

33,760

56.0

18.5

Commercial

23,181

 8,216

38.4

 4,604

56.0

21.5

Total

205,802

   68,468

33.3

 38,364

56.0

18.6


Sources: Total 2002: Energy Information Administration, Natural Gas Annual 2002 (January 2004). Eligibility and Participation: •Total–Kinder Morgan Retail Gas Division. •Residential and Commercial–Estimated based on 2002 data reported on Form EIA-176, "Annual Report of Natural and Supplemental Gas Supply and Disposition" (primary data source for the Natural Gas Annual), which indicate that residential customers account for about 88 percent of the total.

 

Wyoming: Regulatory and Legislative Actions on Retail Unbundling

 

Summary: The Wyoming Public Service Commission approved a choice program for customers in Kinder Morgan’s Torrington service area (10 communities in eastern Wyoming) in 1997. In 2002, the program was expanded to include all Kinder Morgan customers in the state.

 

Regulatory and Legislative Actions

Regulatory Actions

04/03

Denied Request to Extend Choice Selection Period. After considering testimony of interested parties, PSC rejected written requests to extend Choice selection period by 90 days,

 

04/03

Projected Pass-on Service Rates Approved. (Docket 3022-GI-02-3) PSC accepted Kinder Morgan’s compliance filing re pass-on service rates under the Choice Program. Also approved the disclaimer language for customer communication about these rates and approved periodic updates to rates according to same accepted methodology.

 

03/03

Choice Program Modified. PSC decided to let Kinder Morgan’s choice program continue, with modifications. Changed name of “regulated rate” to the “pass-on rate (regulated rate)” and made it an option for all customers and the default rate for customers who make no selection. Decided that the $1 customer charge associated with the choice program cannot be charged to customers who choose the pass-on rate because they receive no benefits from the charge. Supplier information is to be available to customers via toll free telephone and through the Internet, and all customers are to be informed about the availability of budget billing. Directed Kinder Morgan to clarify the distinction between its regulated distribution company and its marketing affiliate and to file compliance tariffs by April 1, 2003.

 

3/02

Choice Extended to Gillette and Casper Service Areas. Program was expanded to include customers in Kinder Morgan’s Casper and Gillette rate service areas as well as in Torrington, thus extending choice to all of Kinder Morgan’s natural gas customers in Wyoming. The PSC also approved a regulated rate option for the choice gas program in the Casper and Gillette divisions.

 

 

 

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File Last modified: 01/31/2004