Status: The State has approved three pilot
unbundling programs for residential customers. |
Overview: Three natural gas utilities in
Florida (Central Florida Gas, which is the Florida Division of Chesapeake Utilities Corporation, Indiantown Gas Company, and Sebring Gas System, Inc.) have converted their residential and commercial sales customers to transportation service and exited the merchant function as part of experimental transitional pilot programs. In November 2002, the Florida Public Service Commission (PSC) allowed Central Florida Gas to transfer its remaining sales customers (which accounted for only 4 percent of the company's throughput volumes) to aggregated customer pools, administered by a qualified pool manager selected by the company. In October 2006, the company requested implementation of Phase 2, in which customers would have a choice of at least two pool managers and a range of pricing options. Phase 2 will offer at a minimum the same rate options available under Phase 1, but customers will be able to choose either of the pool managers, after a 6- to 12-month implementation period, during an annual open enrollment period. The company's request for Phase 2 was approved by the PSC in May 2007. Other than increasing the number of pool managers, the provisions approved for Phase 1 remain unchanged during Phase 2, including Central Florida Gas remaining the supplier of last resort. Phase 3 will further expand the choices available to customers and will require PSC approval.
The PSC approved a request by Indiantown Gas Company in November 2002 to convert its remaining sales customers to transportation service and to exit the merchant function, similar to Phase 1 of Central Florida's pilot program. Indiantown's sales customers represented only 2.5 percent of the total system throughput. The company claimed that the continuing migration of its customer base to transportation service made it increasingly difficult to deliver gas at competitive prices, as the number of producers and/or marketers interested in providing gas supply for such a small usage level is limited. The PSC approved a 2-year transitional pilot program that transfers customers to aggregated customer pools, administered by a pool manager. Reporting and program requirements are the same as for Central Florida's pilot. The company is still in Phase 1 of the transition.
In May 2004, the PSC also allowed Sebring Gas System to exit the merchant function and transfer its small sales customers (using less than 100,000 therms per year) to a single aggregated customer pool. The agreement between the company and the pool manager allows customers to select between two pricing options: a monthly indexed price or a fixed price. Sebring must submit a report to the PSC 90 days before the conclusion of the initial 2-year period of the program that evaluates customer acceptance, the company's capability to expand the program, and the feasibility of continuing the program. Like Indiantown, Sebring is still in Phase 1 of the transition.
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EIA State Profile: In 2006,
Florida
had 673,122 residential and
55,259 commercial customers. They consumed 16 and 51 billion cubic feet of
natural gas, respectively. The average prices paid for natural gas purchased
from local distribution companies and marketers by residential and commercial
customers were $21.54 and $13.91 per thousand cubic feet, respectively.
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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 |
Total |
Percent
of 2006 Customer Total |
Total |
Percent
of Eligible |
Percent
of 2006 Customer Total |
Residential |
673,122 |
14,659 |
2.2 |
14,659 |
100 |
2.2 |
Commercial |
55,259 |
1,204 |
2.2 |
1,204 |
100 |
2.2 |
Total |
728,381 |
15,863 |
2.2 |
15,863 |
100 |
2.2 |
Sources:
2006 Customer Total: Energy Information Administration,
Natural Gas Annual 2006 (October
2007). Eligibility and
Participation: Florida Public Service
Commission (March 2008). | |
Legislative and Regulatory Actions on Retail
Unbundling |
Summary: In April 2000, the Florida Public
Service Commission adopted rules that extend customer choice to all
nonresidential users of natural gas in the State regardless of volume.
This gives small businesses in Florida the same option that was previously
available only to large industrial and commercial customers. The rules
also specify that local distribution companies may offer transportation services to residential
customers. |
Regulatory and Legislative
Actions
|