Retail Unbundling - District of Columbia

Retail Unbundling - District of Columbia
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Status: All residential customers in the District of Columbia may choose their own natural gas supplier.

Overview: All residential natural gas customers in the District of Columbia (D.C.) are eligible to participate in a customer choice program through Washington Gas Light Company, the area's sole natural gas local distribution company (LDC). In February 2001, the Public Service Commission (PSC) gave approval for a full-scale choice program for all D.C. residents. A pilot program had been underway since January 1999 with enrollment peaking at 17,622 in December 2000, then falling to less than 11,000 in the summer of 2001. Participation increased sharply in 2002, with about 26,400 enrolled as of December 2002 (19.5 percent). Participation has generally declined since then, with fewer than 13,000 residential customers (9 percent) enrolled in December 2005 (12,850) and 2006 (12,723) and only 11,990 in December 2007.

The PSC established a working group in February 2001 to recommend incentives for increased supplier participation, develop licensing and certification procedures for marketers, propose customer protection standards, and develop a consumer education program. The PSC adopted most of the working group’s recommendations in April 2003, and licensing requirements and consumer protection measures for marketers were signed into law in November 2004. Four marketers were serving residential customers in December 2007, although one of the four was not enrolling new customers.

All D.C. small commercial customers (using less than 40,000 therms annually) also have full access to customer choice. According to the PSC, there were 11 alternative suppliers serving about one-third of all commercial accounts as of December 2007.

EIA State Data: In 2006, the District of Columbia had 141,953 residential and 10,410 commercial customers who consumed 11 and 17 billion cubic feet of natural gas, respectively. The average prices paid for natural gas purchased from the local distribution company by residential and commercial customers were $16.96 and $14.67 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 December 2007		Participating December 2007
Customer Type	2006 Customer Total	Total	Percent of Customers	Total	Percent of Eligible	Percent of 2006 Customer Total
Residential	141,953	137,277	100	11,990	8.7	8.4
Commercial	10,410	13,130	100	4,504	34.3	43.3
Total	152,363	150,407	100	16,494	11.0	10.8
Note: The Energy Information Administration includes group-metered apartments in the residential customer total, while the District of Columbia Public Service Commission categorizes apartment dwellers as commercial customers. Sources: 2006 Customer Total: Energy Information Administration, Natural Gas Annual 2006 (October 2007). Eligibility and Participation: District of Columbia Public Service Commission (December 2007).

Legislative and Regulatory Actions on Retail Unbundling

Summary: The D.C. Public Service Commission approved a 2-year customer choice pilot program through Washington Gas Light Company (Washington Gas Light tariff GT96-2) in April 1998 for 13,000 residential customers with enrollment starting in the fall of 1998. In May 1999, the PSC removed the cap on the number of customers who can enroll and allowed customers to sign up at any time. The PSC also approved expansion of the "large commercial" customer pilot program to include those who use more than 40,000 therms per year (the previous criterion was 60,000 therms), and approved a pilot aggregation program for small commercial customers (less than 40,000 therms per year) beginning November 1999. The pilot program for residential customers was made permanent in February 2001, and a working group was formed to address the issue of declining marketer participation. The group was also tasked with developing licensing procedures for marketers, a consumer education plan, and customer protection standards. Most of these recommendations were adopted by the PSC in April 2003. The Retail Natural Gas Supplier Licensing and Consumer Protection Act of 2004 (D.C. Law 15-227), signed on November 1, 2004, established licensing requirements and consumer protection measures for marketers providing retail gas service in D.C.

Regulatory and Legislative Actions

Legislation	11/04	The Retail Natural Gas and Supplier Licensing and Consumer Protection Act of 2004 (D.C. Law 15-227). Sets licensing requirements and consumer protections for new companies that supply retail natural gas service in D.C., and mandates a consumer education program. Clarifies the Public Service Commission's (PSC) authority to suspend or revoke licenses, assess penalties, and adjudicate consumer complaints. Also clarifies the Office of the People's Counsel's role as consumer advocate.
	03/01	Prevention of Unauthorized Switching of Customer Accounts Natural Gas Accounts Emergency Act of 2001 (D.C. Bill 14-121). Protects D.C. customers from unauthorized switching of their natural gas accounts, requires customers to give written consent before suppliers can switch accounts and providers, and requires marketers to be licensed by the PSC.
Regulatory Actions	12/07	Consumer Choice Powerpoint Presentation Updated. PSC released information on consumer choices of natural gas, electric, and telephone services in the District of Columbia. As of December 21, 2007, there are four marketers serving 11,990 residential natural gas customers and 11 marketers serving 4,504 commercial natural gas customers. The commercial customer total includes commercial and industrial (C & I) and group-metered apartments (GMA) customers.
	12/07	Five Marketers Directed to Pay Share of PSC 2007 Budget Within 10 days or Lose Certification as Natural Gas Supplier. The PSC ordered BP Energy Company, Metromedia Energy, Inc., PSC Energy Group, Tiger Natural Gas, Inc., and UGI Energy Services, Inc. (doing business as Gasmark) to pay their past-due (September 2007) accounts or give reasons for failing to comply with previous PSC order.
	10/07	PSC Issues 2006 Annual Report. According to the report, the PSC approved two more marketers for the choice programs in 2006, AOBA Alliance and World Energy Solutions. At the end of 2006, marketers served 9 percent of residential customers and 34 percent of commercial customers. Marketers' share of residential usage remained the same as in 2005 (12 percent) while their share of commercial usage increased from 51 to 55 percent.
	03/07	Survey of Competitive Gas Suppliers - Requesting Data for 2006. Data requested include gross revenues from service to D.C. end users, number of therms sold to D.C. end users in 2006, and number of D.C. customers as of December 31, 2006.
	03/07	PSC Rejects WGL Request for Permanent Hedging Program, mainly because program did not result in customer savings during the 2005-2006 winter. However, the PSC extended the program on a pilot basis for another year.
	12/06	Consumer Choice Powerpoint Presentation Updated. PSC released information on consumer choices of natural gas, electric, and telephone services in the District of Columbia. As of December 1, 2006, there are five marketers serving 12,723 residential customers and 11 marketers serving 4,566 commercial customers. The commercial customer total includes commercial and industrial (C & I) and group-metered apartments (GMA) customers.
	09/06	PSC Issues 2005 Annual Report. According to the report, the PSC approved two more marketers for the choice programs in 2005, Select Energy and BP Energy, and Metromedia (licensed in 2004) began serving residential customers. Two companies, BGE Home and Constellation NewEnergy, stopped serving commercial customers. At the end of 2005, marketers served 9 percent of residential customers and 32 percent of commercial customers.
	03/06	Survey of Competitive Gas Suppliers - Requesting Data for 2005. Data requested include gross revenues from service to D.C. end users, number of therms sold to D.C. end users in 2005, and number of D.C. customers as of December 31, 2005.
	01/05	PSC Approves WGL's Mandatory Capacity Release Proposal. Order 13483 approved WGL's application to amend general service provisions related to capacity assignments. In order to ensure that marketers are contracting for sufficient capacity to meet firm transportation demand, WGL may generally assign capacity to suppliers up to 50 percent.
	02/04	Blanket Bill Report Approved. PSC approved working group recommendation that Washington Gas Energy Services (WGES) be exempted from minimum billing component provisions in Order 12709, subject to an annual review. WGES must submit a report each December 1 on how the renewal process is working, including the number of renewals and new accounts using the blanket bill program.
	11/03	Blanket Bill Report. The GT 96-3 working group filed a report, requested by the PSC, that recommended an exemption from minimum billing component provisions for WGES since the company uses a blanket bill program. Previously, the PSC had rejected WGES' request for an exemption but referred the issue to the working group for its recommendation.
	04/03	New Licensing and Customer Protection Rules for Marketers. Order 12709, GT 96-3. The PSC adopted interim rules and initiatives designed to expand retail competition, license suppliers, protect customers, and improve consumer awareness. Licensing procedures were modeled after those approved (2000) for electricity suppliers and require current certificates of good standing. Customers may be solicited by telephone, radio, newspaper and electronic ads, and in person; and enrollment may be by phone, over the Internet, or by written contract. Suppliers must give customers at least 35-days written notice before terminating a contract and 60-day notice for automatic contract renewals.
	02/01	Pilot Program Made Permanent. Order 11928, Docket 99, 2-21-01. The PSC also directed that a working group be formed to develop licensing and certification procedures for marketers, recommend incentives for increased supplier participation, develop a consumer education plan, and propose customer protection standards.
	02/00	Rolling Enrollment for Small Commercial Customer Pilot. On February 16, 2000, the PSC instituted a rolling enrollment for all customers.
	10/99	Customer Choice Pilot for Small Commercial Customers. Washington Gas Light tariff GT97-3 effective 10/22/99. The PSC extended the deadline to 12/31/99 for enrolling in a 2-year pilot choice program starting 11/1/99 for small commercial customers (those using less than 40,000 therms per year). Participation in the pilot is for at least 1 year with enrollment possible for an additional 1-year period not to extend past 1/2002.
	05/99	Expansion of Customer Choice Pilot. Washington Gas Light tariff. The PSC removed the cap on the number of customers who can enroll in the choice pilot program so that all residential customers are eligible. The PSC eliminated the enrollment deadline of March 1999 and instead allows customers to enroll at any time. Service is for a term of at least 1 year and not to extend past 3/2001. Marketers participating in the pilot must have in aggregate a minimum of 100 dekatherms of customers' daily contract quantity. The "large commercial" customer pilot program was expanded to include those who use more than 40,000 therms per year (the previous criterion was 60,000 therms). The PSC also approved a pilot aggregation program for small commercial customers (less than 40,000 therms per year) with enrollment scheduled between 8/1/99 and 10/1/99.
	04/98	Approval of Customer Choice Pilot for 13,000 Residential Customers. Washington Gas Light tariff GT96-2. The PSC approved a 2-year pilot choice program for 13,000 residential D.C. customers beginning 11/1/98. Service under the pilot is for a 1-year term that can be renewed for an additional 1-year period. A customer requesting a return to bundled service must give 1-month notice.
	02/98	Approval of Customer Choice for D.C. Businesses. Washington Gas Light tariff. The PSC approved customer choice for large commercial customers who consume at least 60,000 therms of gas annually. Third-party supply service is available after 4/1/98 and enrollment is for a minimum of 1 year.