EIA State Data: In 2006, Colorado had 1,558,911 residential and 139,746 commercial customers. They consumed 119 and 60 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 $10.45 and $9.61 per thousand cubic feet, respectively. |
Regulatory and Legislative Actions on
Retail Unbundling
Summary: Legislation became effective
on August 4, 1999, that allows natural gas utilities to file voluntary
plans for unbundling, subject to approval by the Colorado Public Utilities
Commission. These plans must include provisions for service reliability,
market power safeguards, consumer education, and affiliate participation
requirements. When a plan has been approved, utility delivery service will
be provided separately from gas sales and consumers will have the option
of purchasing gas from an alternative supplier. All utility services will
remain regulated until one-third of the utility's customers have chosen an
alternative supplier (18 percent of the customers must choose an
unaffiliated supplier) and at least five unaffiliated suppliers are
operating within the utility's service area. At that point, the PUC will
no longer regulate the utility's supply services but will continue to
regulate delivery services. |
Regulatory and Legislative Actions
Legislation |
08/99 |
1999 Gas Unbundling
Legislation (Senate Bill
99-153), signed on 5/28/99 and effective on 8/4/99. The act allows
gas utilities to file unbundling plans with the PUC that give
consumers the opportunity to choose their own gas supplier. Plans
are to address issues of service reliability, fall-back supply
service, affiliate participation, access to upstream capacity,
market power safeguards, consumer education, standards of conduct,
and marketer certification requirements. If the PUC modifies a
utility's plan, the utility can reject it and continue to operate as
before but cannot file another plan for 2 years. The utility can
recover "prudently incurred" stranded costs, subject to a cap. The
PUC is to provide an unbundling status report to the legislature by
12/31/2000 that includes recommendations on further implementation.
The PUC is responsible for developing requirements for marketer
certification, data reporting, and penalties. Municipalities can
approve unbundling plans for their municipal utilities. The
legislation also approves funds for a PUC study of the effects of
market restructuring on low-income consumers, which is due 2 years
after implementation of the first
program. |
|
05/96 |
Legislation Mandating an Independent Study
of Feasibility of Gas Unbundling (Senate Bill
96-138), signed 5/96. The act mandates an independent study of the
feasibility of restructuring the state's gas industry, which
resulted in the 12/16/96 Hagler Bailly report "The Feasibility of
Allowing Nondiscriminatory Access to Retail Natural Gas Distribution
Systems in Colorado." The study concluded that retail unbundling in
the state is technically feasible but would raise many complex
transitional issues. The Legislative Council directed the PUC to
review the report. |
Regulatory
Action |
12/00 |
PUC Status Report on
Unbundling (required by
Senate Bill 99-153). No utilities have submitted unbundling plans.
Public Service Company of Colorado has stated that it intends to
file a proposal after "electricity unbundling is complete in Texas
and NM." Kinder Morgan has expressed interest but not indicated a
possible date. No other utilities are interested at this time. Those
companies cited high costs of implementing program, concerns about
marketer participation, and disinterest by
consumers. |
|
08/97 |
Proposed Framework for
Unbundling (developed by
PUC staff). Natural gas delivery is to continue as a regulated
monopoly service, with a single utility certificated for a service
area. Customers can choose their own gas supply service with
unregulated prices and service offerings. A default supplier will
provide service to customers who do not choose one and a "supplier
of last resort" will be established for each utility system.
Provisions for billing, meter reading, and upstream pipeline
capacity and storage will be decided on a case-by-case basis.
Utilities are to eliminate fixed charges for residential and small
commercial customers, file plans to replace the current nomination
and balancing requirements for transportation customers, and to
phase in competition for all customers in its service area. To
enable price comparisons, competitive gas suppliers are to offer
customers a 1-year, fixed price option. LDCs can ask for recovery of
"net, verifiable" stranded costs, which if approved would be
recovered through a separate charge to all distribution customers.
Utility affiliates are to be permitted to participate on the same
basis as other suppliers, without benefit of utility customer
information etc. Utility filings are to include a "Supplier Code of
Conduct," supplier requirements, and sample LDC/supplier contract
forms. All suppliers are to be registered with the
PUC. |
|
06/97 |
Staff Inquiry into
Unbundling. On 6/11/97, the
PUC approved a plan to develop a framework for moving ahead on
unbundling in case an LDC requests permission to unbundle gas
services, the legislature mandates unbundling, or the PUC opens a
rulemaking docket for gas unbundling. The PUC planned to distribute
the framework in 8/99 with written comments due by
9/15/97. |
|
03/97 |
Request for Statutory
Authority (letter to CO
Legislative Council). After review of Hagler Bailly study, the PUC
requested that the state legislature grant the PUC statutory
authority to implement customer choice for natural gas customers, if
found to be in the public interest. |
|
02/97 |
Investigation into Gas Industry
Restructuring, Docket No.
971-033G. As per directive of the CO Legislative Council, the PUC
solicited comments on the Hagler Bailly report on the feasibility of
gas unbundling, with hearings to be held 3/97. The report stated
that retail unbundling in the state is technically feasible but
would raise many complex transitional issues, altering consumers'
financial risks and
rewards. | |