Retail Unbundling

Retail Unbundling - Wyoming
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Status: Wyoming has one customer choice program for residential customers.

Overview: Wyoming's residential choice program ("Choice Gas"), which was set up by Kinder Morgan, Inc. (formerly known as KN Energy, Inc.) and approved by the Wyoming Public Service Commission (PSC), is in its 12th 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 was 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 could not 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.

Kinder Morgan sold its natural gas utility assets in 2007 to SourceGas Utility, Inc., which has continued the choice program. Four suppliers besides the utility are participating in the 2007-2008 choice program, which began on June 1, 2007, and runs through May 2008. As in 2006, about 51 percent of the utility's customers have chosen the utility’s pass-on rate, while 28 percent are enrolled with its marketing division, SourceGas Energy Services, which was formerly Kinder Morgan Choice Gas Supply. The State Office of Consumer Advocate filed a formal complaint with the PSC in April 2005, accusing Kinder Morgan’s marketing affiliate of false and deceptive advertising during the 2005-2006 choice selection period. The PSC dismissed the suit on a technicality in June 2005, but voted in December 2005 to require companies participating in choice programs to submit ads to the PSC within 2 days of running the ads.

EIA State Data: In 2006, Wyoming had 142,385 residential and 18,016 commercial customers. They consumed 12 and 10 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 $11.60 and $10.30 per thousand cubic feet, respectively.

Eligibility and Participation in Retail Choice Programs:

Eligibility and Participation by Customer Class, December 2007

Customer Type	2006 Customer Total	Eligible in 2007		Participating in 2007
Customer Type	2006 Customer Total	Total	Percent of 2006 Customer Total	Total	Percent of Eligible	Percent of 2006 Customer Total
Residential	142,385	63,912	44.9	32,311	50.6	22.7
Commercial	18,016	8,715	48.4	4,406	50.6	24.5
Total	160,401	72,627	45.3	36,717	50.6	22.9
Sources: 2006 Customer Total: Energy Information Administration, Natural Gas Annual 2006 (October 2007). Eligibility and Participation: •Total–SourceGas Energy Services Company . •Residential and Commercial–SourceGas estimates and 2006 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.

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. In March 2005, the PSC approved the company’s request (November 2004) to allow customers to rollover their existing service choices without another enrollment.

Regulatory and Legislative Actions

Corporate Changes	03/07	Kinder Morgan's Retail Gas Division Sold. The utility was renamed as SourceGas Distribution LLC, and its marketing division became SourceGas Energy Services, which was formerly Kinder Morgan Choice Gas Supply.
Regulatory Actions	04/05	Consumer Advocate Files Complaint Against Kinder Morgan Marketing Affiliate. The State Office of Consumer Advocate filed a formal complaint with the PSC in April 2005, accusing Kinder Morgan's marketing affiliate of false and deceptive advertising during the 2005-2006 choice selection period.
	03/05	Kinder Morgan Tariff Language Change Approved (Docket 3022-GT-04-48). PSC approved KM request to allow customers to opt out of making an annual choice and instead rollover their existing service choice. Approval was conditioned on KM supplying approved educational information to customers and subsequent written approval by the PSC.
	11/04	Kinder Morgan Requests Tariff Language Change (Docket 3022-GT-04-47). Company applied to revise tariff language regarding customers who switch from choice to distribution transportation service. A decision is expected prior to enrollment deadline for next year's choice program.
	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.
	03/02	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.