Status: The State's one pilot choice program
for residential customers was discontinued as of October 31, 2001. |
Overview: In April 2001, Wisconsin Gas
Company, the largest local distribution company (LDC) in the State with
about one-third of the residential market, decided not to continue its
pilot program beyond October 31, 2001, because of declining marketer and
customer participation. Only two suppliers were serving residential
customers and four were serving commercial customers. The program began in
November 1996 in the West Bend area and was later expanded to include
customers in three more municipalities. In the last year of the program
(November 2000 - October 2001), 1,838 residential customers were enrolled
(7 percent of those eligible) and 1,647 commercial customers (5 percent of
those eligible). According to the Public Service Commission of Wisconsin (PSC),
instead of choice, some Wisconsin utilities are offering customers
alternative services. For example, three utilities offer a fixed-bill
option and one utility offers a fixed-price service. Both of these billing
choices are intended to help customers budget and avoid price spikes,
rather than as a way to save money, and are particularly popular with
schools and municipalities. As of December 2007, the PSC is not considering any actions relating to residential choice, and it appears unlikely that any LDC in the State will propose any pilot programs. |
EIA State Data: In 2006,
Wisconsin
had 1,611,772 residential and
159,074 commercial customers. They consumed 121 and 86 billion cubic feet of
natural gas, respectively. The average prices paid for natural gas purchased
from local distribution companies by residential and commercial customers in
2006 were $12.17 and $10.27 per thousand cubic feet, respectively. |
Legislative and Regulatory Actions on
Retail Unbundling
Summary: In 1992, the Public Service
Commission of Wisconsin formed a workgroup to identify and
investigate State regulatory options in light of the restructuring of the
interstate natural gas industry. Based on the workgroup report and a staff
study, the PSC endorsed unbundling of the State's gas industry when and as
customer classes gain "effective market choice"and opened a docket in
December 1995 to begin the process. Standards of conduct were developed to
govern relationships between local distribution companies and
affiliates, and new cost categories were established for rate case
cost-of-service studies. In 1997, the PSC approved a case-by-case
"workable competition" approach to assess whether effective competition
exists in a particular market. It determined that consumer protection and
reliable service policy issues would need to be addressed before
deregulation could begin and ordered formation of six workgroups to
consider (1) capacity policy, (2) marketer certification, (3) legislation
issues, (4) price reporting, (5) market-based pricing for large-volume
customers, and (6) consumer protection and essential service measures. |
Regulatory and Legislative Actions
Regulatory
Actions |
04/01 |
Wisconsin Gas Co. Files to Discontinue
GasAdvantage as of Oct 31, 2001. The company notified the Public Service Commission (PSC) that it would cancel
its pilot as of October 31, 2001, citing declining marketer interest
and high program expenses. The company claimed the plan was costing it
$800,000 to $1.6 million a year to operate and could not be
continued without charging its customers substantial fees. The pilot
program operated for 5 years and allowed marketers to serve small
customers, using algorithms to estimate daily usage as opposed to
using expensive telemetering
equipment. |
|
12/00 |
Wisconsin Public Service Corporation Offers Gas Choice
to Medium-Sized Customers. The approved program will use a
telephone-based meter reading system to monitor gas usage. Effective
November 2002, the program will be available to all customers who
consume more than 15,000 therms (except those in Wisconsin Fuel
and Light's territory), with enrollment from Jan. 1, 2002 through
March 1, 2002. |
|
04/00 |
GasAdvantage Approved for Fifth
Year. The PSC approved
continuation of Wisconsin Gas Company's customer choice program for
a fifth year, from 11/1/00 to
10/31/01. |
|
04/99 |
GasAdvantage Approved for Fourth
Year. The PSC
approved continuation of Wisconsin Gas Company's customer choice
program for a fourth year, from 11/1/99 to 10/31/00. Residential
customers in West Bend, Slinger, Hartford, and Jackson are eligible
(before only West Bend) with enrollment running from 7/1/99 to
9/30/99. The number of eligible commercial customers will be
expanded to include all in the ANR-served territory, and available
capacity will increase from 11,300 Decatherms (Dth) to 22,000 Dth
peak-day service. |
|
06/98 |
GasAdvantage Approved for Third
Year. The PSC
approved continuation of Wisconsin Gas Company's customer choice
program for a third year for customers in certain zip codes in West
Bend. Marketers provide billing and gas supply services while
Wisconsin Gas handles delivery and related services. Currently
enrolled customers may stay with their current marketer or choose a
new one. Once enrolled in the program, customers may not return to
Wisconsin Gas for supply service from 11/1/98 to
4/16/99. |
|
10/97 |
Consumer Protection and Service Policy
Issues. The PSC
ordered formation of six workgroups to consider (1) capacity policy,
(2) marketer certification, (3) legislation issues, (4) price
reporting, (5) market-based pricing for large-volume customers, and
(6) consumer protection and essential service
measures. |
|
06/97 |
Competitive Market
Standards, PSC
Order 05-GI-108, Phase III. In Phase III of the restructuring
docket, the PSC focused on how to determine whether a market is
sufficiently competitive to reduce or eliminate regulation and to
determine what barriers there are to effective competition. The PSC
approved a "workable competition" standard to be used in assessing
whether effective competition exists in a particular market. The
standard would be applied on a case-by-case basis and would be based
on a reasonable number of suppliers (Herfindahl-Hirschman Index of
2,000 to 2,500), low barriers to competition, sufficient capacity,
informed consumers, and "responsive"
suppliers. |
|
01/97 |
Standards of Conduct Regarding Opportunity
Sales, PSC Order
05-GI-108, Phase II. Standards were developed to ensure that all
opportunity sales are made on a nondiscriminatory basis. Gas
utilities must make monthly filings to the PSC of all opportunity
sales and indicate to the PSC and all interested parties the
guidelines used by the LDC when making long-term and short-term
opportunity sales. Standards were also developed to govern relations
between utilities and their affiliates to ensure that utilities not
disclose any customer-specific information and to prevent any cross
subsidies. |
|
12/95 |
Restructuring Docket
Opened, PSC Order
05-GI-108, Phase I. The PSC ordered that LDCs must separate gas
supply and capacity assets to make both regulated and deregulated
sales. LDCs can serve the deregulated market only through a separate
affiliate that has separate books, assets, and personnel. LDCs can
sell unutilized assets ("opportunity sales") to mitigate total
costs. Standards of conduct will be developed to govern these
sales. |
|
04/94 |
Staff Study of Regulatory
Reform. The PSC
staff presented four market models for restructuring the retail gas
industry: (A) deregulate both gas commodity and interstate capacity;
(B) deregulate only gas commodity; (C) retain regulation, but place
increased reliance on market forces; or (D) deregulate gas commodity
and/or capacity as customers gain effective market choice. The PSC
selected Model D and those portions of Model C that would unbundle
regulated utility services. |
|
09/93 |
Workgroup Report on Natural Gas
Regulation. In
March 1992, the PSC established a workgroup of utility personnel and
PSC staff to identify and evaluate issues related to regulatory
reform in the State. The workgroup presented its report to the PSC
in September 1993 that presented three regulatory options: a
market-based strategy, a problem-solving strategy, and a planning
strategy. The PSC adopted the problem-solving strategy and formed a
staff study group to address restructuring issues raised in the
report.
| |