Overview: In January 1998, the Oklahoma Corporation Commission adopted rules for competitive bidding of natural gas services both before (upstream) and after (downstream) the city gate (the delivery point to local distribution companies (LDCs)). These rules required all LDCs with 25,000 or more customers to file a plan for unbundling of all services by April 1998, with plans by smaller utilities due a year later. The original schedule called for retail gas competition to begin by October 1999. However, this date was extended indefinitely because of a number of unsettled issues such as capacity reallocation, tax, and municipal franchise issues. Some LDCs in the State, including Oklahoma Natural Gas Company with about 75 percent of the residential and commercial markets, have commission-approved tariffs that allow transportation-only service for schools, hospitals, and small businesses. Some companies also offer a voluntary fixed-price plan in which residential and small commercial customers can purchase their natural gas at a fixed per-unit price for a 12-month period.

In 2007, Center Point Energy and Oklahoma Natural Gas received approval to delay the unbundling of downstream services for smaller usage and residential customers until 2011. The time extension would make the unbundling plans due on June 1, 2010, with a commission order due September 1, 2010, and an in-service date of September 1, 2011. During testimony, parties generally agreed that there are a number of legislative and policy issues that should be addressed, and or considered, before downstream services are fully unbundled and available for small usage and residential customers. The commission staff noted that there are still issues with the regulation and oversight of gas marketers, supplier of last resort, consumer education, and taxes.