Status: The State has no unbundled services
for residential customers, although three marketers are authorized to serve
small-volume customers. |
Overview: Iowa has been considering customer
choice options for many years. In October 1997, the Iowa Utility Board
adopted rules that gave utilities the option to file tariffs to implement
unbundled service to small customers, including residential customers. All
utilities in the State filed plans in late 1998, but the plans were quite
diverse. Several workshops were conducted, but there was still
disagreement among utilities, marketers, and consumer advocates as to how
to proceed. In March 2000, the board dismissed the unbundling plans,
determining that they either moved too slowly or too quickly in opening
the residential market to competition. Instead, the board ordered each
utility to propose tariff changes that "remove the primary barriers to
providing a competitive option for small-volume customers interested in
transporting gas." In its order, the board also noted that some of the
issues raised during the workshop process might need to be resolved
through legislation. All the utilities filed new unbundling draft tariffs
in November 2000.
In July 2003, the board decided that
implementation of a small-volume gas transportation plan would no longer
be in the public interest because of significant industry changes. Instead
the board initiated (October 2003) an inquiry that focused on ways to
limit price risk for small-volume customers. At a workshop held in July
2004, discussions centered on fixed-bill alternatives and proposals to
modify rules and tariffs to give small-volume customers the same options
as large-volume customers. In a separate proceeding in August 2004, the
board approved expansions of MidAmerican Energy Company’s and Interstate
Power and Light Company’s pilot small-volume transportation programs,
which have been in place since 1997, to include participation by
governmental entities with predictable heat-sensitive loads, in addition
to the schools and community colleges that were already eligible. The
pilots are scheduled to continue until August 2007, and the utilities are
required to report annually on such issues as participation levels, cost
effectiveness, reliability, and program costs. According to the board,
these reports will be used for input into further decisions regarding rule
changes affecting small volume non-residential customers.
All
marketers operating in the State must be certified by the utility board.
According to rules adopted in February 2001, applicants must demonstrate
operational and financial capability to deliver services and file
financial statements. Certified marketers must file an annual report
giving the number of small and large customers served each month, total
sales to small- and large-volume users, and revenues collected. As of
December 2006, three marketers, including the Joint Utility Management
Program which provides gas aggregation service to participating school
boards, were certified to provide service to small-volume users. The
school board aggregation program began in 1997 as a pilot project. |
EIA State Data: In 2005, Iowa had 850,095 residential and 97,767 commercial customers who consumed 67 and 45 billion cubic feet of natural gas, respectively. The average prices paid for natural gas purchased from local distribution companies (LDCs) by residential and commercial customers were $12.29 and $10.64 per thousand cubic feet, respectively. |
Legislative and Regulatory Actions on
Retail Unbundling
Summary: Several regulatory changes
have been made in anticipation of unbundling gas service to residential
customers. |
Regulatory and Legislative Actions
Regulatory
Actions |
08/04 |
Board approved
settlement regarding small-volume transportation tariffs for MidAmerican
Energy Company and Interstate Power and Light Company (IPL).
Agreement reached by the Iowa Joint Utility Management Program, the
Consumer Advocate, MidAmerican, and IPL that expands the
availability of pilot small-volume transportation programs to State
and local governments with heat-sensitive predictable loads. IPL's
pilot continues through August 1, 2007, and the utility has the
right to stop enrolling new customers at each anniversary date.
Customers can return to system supply for a $50 fee (rather than
$500) if notification occurs between May 1 and July 1 or at an
agreed-upon date prior to November 1. MidAmerican's pilot will run
from September 1, 2004, through August 31, 2007, with similar terms
as IPL's. An administrative charge cap of $0.25 per dekatherm (Dth)
will continue through the pilot period and be trued-up
annually. The administrative charge for the first year will be $0.08
per Dth. The two utilities must respond annually to 10 information
requirements during the pilot, which include the number of eligible
customers, participation levels, names of participating marketers
and numbers they serve, comparison of monthly pilot delivery prices
vs. prices of system supply, program costs, problems encountered,
and program evaluation. |
|
05/04 |
Workshop
scheduled (July 1, 2004) on bill risk management. Issues to be
discussed include: definition of small volume customers, types and
variety of risk reduction options, energy efficiency and
conservation components, and hedging. |
|
10/03 |
New inquiry into
bill risk management. A marketer and municipality requested
reopening of the small-volume transportation docket. Instead, the
Board opened a more directed inquiry that would focus on ways to
limit price risk for small-volume customers. |
|
07/03 |
Docket closed regarding
small-volume gas transportation rules. Board decided
implementation of a small-volume gas transportation plan would no
longer be in the public interest, citing significant industry
changes. |
|
04/03 |
Board granted
Nicor Energy's request to discontinue service. Board granted
Nicor Energy's request to surrender its certificate to operate as a
competitive natural gas provider (CNGP) in the State. Effective
April 1, Nicor had either assigned its customers to another CNGP or
terminated the contracts. |
|
10/01 |
Board certified
eight marketers, including the Iowa Joint Utility Management
Program that operates an aggregation program for Iowa school
boards. Program operated as a pilot for the past 4 years. |
|
07/01 |
Nicor Energy
marketer application approved (Docket No. CGP-01-2). |
|
02/01 |
Rules adopted
for certifying marketers (RMU-00-7). Applicant must demonstrate
operational and financial capability to deliver services and file
financial statements. Board will issue decision within 90 days of
application unless it needs another 60 days. Application processing
scheduled to begin April 25. Certified marketers must file an annual
report giving the number of small and large customers served each
month, total sales to small- and large-volume users, and revenues
collected from both small and large customers. Marketers must file
rates each month for each customer class. |
|
11/00 |
Utilities filed
new draft tariffs to unbundle services. Expected to be in place
in the spring of 2002. |
|
03/00 |
Board dismissed
utilities' unbundling plans. Instead, the board ordered each
utility to propose tariff changes that "remove the primary barriers
to providing a competitive option for small-volume customers
interested in transporting gas," and requested comments within 30
days regarding the procedural steps for designing these tariffs. In
its order, the board also noted that some of the issues raised
during the workshop process may need to be resolved through
legislation. |
|
12/98 |
Board authorized
a workshop process for development of competitive markets
(Docket NOI-98-3). In order to reach more uniformity, the utility
board authorized a workshop process that would bring together
utilities, marketers, and consumer advocates to discuss issues
related to creating a competitive market. Five workshops were
conducted between January and mid-April 1999, with parties agreeing
on the concepts of regulation of gas delivery services, the
obligation to serve, and the need for educating consumers. However,
there was still disagreement as to how to proceed, with some
advocating a legislative approach, others proposing aggregation
programs, and others proposing quite diverse alternatives. |
|
10/97 |
New rules
adopted (Docket No. RMU-96-12 ) that allow utilities to file
tariffs to implement unbundled service to small customers, including
residential customers. |
|