| Status: The State has begun the process of
implementing comprehensive unbundling programs for its residential gas
customers. |
Overview: Since July 1, 2000, Virginia law
has allowed utilities to offer statewide customer choice programs if
approved by the State Corporation Commission (SCC). Effective April 1,
2001, Washington Gas Light Company (WGL) became the first utility with
authorization to permit all of its customers in the State to buy natural
gas directly from a certified, retail energy supplier. The program was
phased in during a 1-year period, with choice available at first to
150,000 residential customers and then to the rest of the company's
residential customers in the State in January 2002. As of January 1, 2007,
49,315 residential customers (12 percent of eligible) in WGL’s service
territory were enrolled (which includes customers of Shenandoah Gas
Company, a division of WGL), down from 53,195 (13 percent) in January 2006. In contrast, about 62,000 (16 percent) of WGL's residential customers were enrolled in
January 2005 and 67,000 (18 percent) in January 2004. Columbia Gas of
Virginia also has had a choice program in place for all customers in its
service area since October 1, 2002, with about 6,837 residential customers
and 2,257 nonresidential customers enrolled as of August 1, 2006. Similar to WGL's program, residential customer enrollment in Columbia Gas of Virginia's program has decreased in the past few years, while nonresidential enrollment has increased. In 2005,
about 7,370 residential customers and 1,988 nonresidential customers were
participating, while in 2004, about 8,818 residential customers and 1,212 nonresidential customers were enrolled. The company had conducted a pilot program from 1997
to 2002 in selected areas of Northern Virginia, with about 9,600 residential
customers enrolled as of July 2002.
As of August 2006, six
marketers were serving residential natural gas customers in the State,
four in WGL’s service area and two in Columbia Gas of Virginia’s. In its most recent annual report (September 2006) on the status
of retail access and competition, the SCC noted that about 85 percent of
choice customers (residential and nonresidential) in WGL’s service area buy gas from WGL’s affiliate Washington
Gas Energy Services. In Columbia Gas of Virginia’s area, choice service
accounts represent about 4 percent of all customers, with two
non-regulated affiliates serving the greatest number of
customers.
The SCC adopted permanent rules for
energy choice in 2001. These rules require that
local distribution companies provide marketers with names and addresses of
eligible customers and their monthly energy consumption for the previous
12 months, if customers choose to have the information released. All bills
must use standard terms and include a customer's monthly energy
consumption for the past 12 months and a description of all applicable
charges and rate changes. Marketers must be licensed by the SCC and
demonstrate the financial and technical ability to deliver services to
Virginia utility customers. |
| EIA State Data: In 2005, Virginia had 1,066,302 residential and 90,577 commercial customers who consumed 85 and 66 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 $15.15 and $11.85 per thousand cubic feet, respectively. |
| Eligibility and Participation in Retail Choice
Programs |
Eligibility and Participation by Customer Class, December 2006
Customer Type |
2005 Customer Total |
Eligible December 2006 |
Participating December
2006 |
|
Total |
Percent
of 2005 Customer Total |
Total |
Percent
of Eligible |
Percent
of 2005 Customer Total |
|
Residential |
1,066,302 |
629,783 |
59.1 |
56,152 |
8.9 |
5.3 |
|
Commercial/Industrial* |
91,979 |
46,484 |
50.5 |
10,011 |
21.5 |
10.9 |
Total |
1,158,281 |
676,267 |
58.4 |
66,163 |
9.8 |
5.7 |
*Virginia had 90,577 commercial and 1,402 industrial customers in 2005.
Sources: 2005 Customer Total: Energy
Information Administration, Natural Gas Annual
2005 (November 2006). Eligibility: Based on customer totals for Washington Gas Light Company, Shenandoah Gas Company, and Columbia Gas of Virginia reported on Form EIA-176, "Annual Report of Natural and Supplemental Gas Supply and Disposition," which is the primary data source for EIA's Natural Gas Annual. Participation: Virginia State Corporation Commission and Washington Gas Light Web Site (www.washgas.com). |
|
Legislative and Regulatory Actions on
Retail Unbundling
Summary: The Virginia General Assembly
enacted legislation on July 1, 1999, that allows all natural gas utilities in the
State to offer retail supply choice to its customers as of July 2000. All
retail choice plans must first be approved by the State Corporation
Commission. The legislation was reenacted and modified in 2000 and
included provisions for a natural gas consumption tax that would be added
to customers' bills. The General Assembly has also passed legislation
(enacted July 1999) that opened the retail electricity market to
competition during a phase-in period from January 1, 2002, to January 1,
2004. Competitive suppliers participating in natural gas pilot programs
must apply for a permanent license and operate under rules adopted by the
SCC that became effective on August 1, 2001. In order to become licensed,
a provider must demonstrate the financial and technical ability to deliver
services to Virginia utility customers. Retail choice rules apply to both
natural gas and electricity markets. |
Regulatory and Legislative Actions
|
Legislation |
03/00 |
Modifications to Retail Choice
Legislation, HB 279 and SB 185. Legislation approved
(enacted July 2000) that authorizes gas suppliers, pipeline
distribution companies, and gas utilities to file a retail supply
choice plan that includes provisions to implement the program,
methodology to recover stranded costs, proposed unbundled rates and
terms, and provisions to insure that one class of customer does not
subsidize another class. The bill would also create a natural gas
consumption tax, which would be added to the consumer's
bill. |
|
|
03/99 |
Statewide Retail Choice
Approved, Senate Bill
1105. Legislation was approved (enacted July 1999) that authorizes
all natural gas local distribution companies to offer supply choice
to their customers. Such plans are to be approved by the SCC and
would not start before July 2000. The law also calls for a study of
gas utility taxation issues before the 2000 legislative session. The
legislation will expire on July 1, 2000, unless reenacted by the
General Assembly. |
Regulatory
Actions |
09/06 |
Annual Report on Status of Competition. Report to the Governor focuses on electric power competition
but also provides a brief summary of gas retail access programs. As of August 1, 2006, Washington Gas Light Company's (WGL)
program had 4 active marketers serving about 51,000 residential
customers and 12 marketers serving about 7,600 non-residential customers.
Columbia Gas of Virginia's program had two marketers providing service to
6,837 residential customers and three marketers serving 2,257 non-residential customers.
Cumulatively, choice customers account for about 13.1 percent of gas
consumers in WGL's service area and 4.0 percent of those in Columbia
Gas of VA's area. |
|
|
09/05 |
Annual Report on Status of Competition.
WGL's
program has four active marketers serving about 56,000 residential
customers and 12 marketers serving 6,977 non-residential customers.
Columbia Gas of VA's program has four marketers providing service to
7,370 residential customers and 1,988 non-residential customers.
Cumulatively, choice customers account for about 14.6 percent of gas
consumers in WGL's service area and 4.2 percent of those in Columbia
Gas of VA's area. |
|
|
09/04 |
Annual Report on Status of Competition.
Report appendix provides a summary of gas
retail access programs. WGL's program has four active marketers
serving 65,840 residential customers and 12 marketers serving 7,155
nonresidential customers. Columbia Gas of VA's program also has four
marketers providing service to 8,818 residential customers and 1,212
non-residential customers. |
|
|
08/03 |
2003 Report to the Governor on Status of
Competition. Report provides details on development of
competitive retail energy markets, with emphasis on electric power
markets. Appendix notes that marketer activity has been better in
the natural gas program than in electric programs but actual level
of competition may be distorted because of the high level of
affiliate concentration. |
|
|
06/02 |
Columbia Gas Authorized to Extend Choice
to All Customers. The SCC
authorized Columbia Gas of VA to extend its customer choice program
to all its customers in the State. The company serves about 200,000
customers in central Virginia, portions of the Shenandoah Valley,
portions of Northern Virginia, and part of the Hampton Roads region,
including Suffolk and Portsmouth. The company plans to implement its
choice plan in time for the 2002-2003 heating
season. |
|
|
04/01 |
Washington Gas Authorized to Extend Choice
to All Customers. The program is
being phased in during a one-year period, with choice available at
first to 150,000 residential customers and then to the rest of the
company's residential customers in the State in January
2002. |
|
|
06/01 |
Permanent Retail Choice Rules
Adopted (effective August 2001). These rules require
that local distribution companies give marketers the names,
addresses, and monthly energy consumption for the year (previous 12
months) of eligible customers, if customers' choose to have the
information released. All bills must use standard terminology for
distribution service, competitive transition charge, natural gas
supply service, and taxes. Bills must include a customer's monthly
energy consumption for the past 12 months and a description of all
applicable charges and rate changes. Marketers must be licensed by
the SCC and demonstrate the financial and technical ability to
deliver services to Virginia utility
customers |
|
|
02/00 |
Retail Access Pilot Program
Rules, Order Inviting Comments, Case PUE980812.
The SCC revised proposed standards governing retail access pilot
programs presented in the hearing examiner's August 1999 report. The
rules cover the relationship between LDCs and competitive service
providers, their responsibilities to retail customers, and licensing
requirements for competitive service providers. The revised rules
are more detailed than in the hearing examiner's report and include
a definitions section and a section on requirements for aggregators.
Written comments are due by
2/24/2000. |
|
|
12/99 |
Consumer Education Program
Plan, SCC Report to Legislature. The SCC
recommends a 5-year education program to inform consumers about
energy choice in Virginia. The program would require mass media
marketing and advertising and would be funded through the SCC's
special revenue tax assessed on regulated utilities. The report will
be considered by the Legislative Transition Task Force, which was
established to monitor the State's energy restructuring
effort. |
|
|
08/99 |
Columbia Gas Pilot
Extended, Case
PUE990245. The SCC approved continuance of Columbia's customer
choice program (formerly Commonwealth Choice) until October 1, 2000,
provided that the company file an interim balancing study by the end
of August 1999 and a final balancing report at the end of the pilot.
Originally the pilot was approved for the 2-year period from October
1997 to October 1999. About 25 percent (6,500) of eligible customers
are participating. |
|
|
08/99 |
Retail Access Pilot Program Rules, Hearing
Examiner Report, Case PUE980812.
The examiner recommended that the task force's proposed rules be
adopted with limited modifications and clarifications. Marketing
materials must include clear pricing terms and residential monthly
bill estimates based on 7.5 thousand cubic foot consumption.
Customers have a 3-day rescission period. Deposits required by
marketers cannot exceed the equivalent of a customer's estimated
liability for 2 months of service. Marketers must have sufficient
gas delivery capability to serve their firm customers; if not, LDCs
can impose penalties. A utility may not give its affiliates any
preference in providing regulated services; may not tie regulated
service to any other product; and may not disclose any
customer-specific information (unless requested by customer).
Utilities and affiliates must maintain separate books and records.
All aggregators and competitive service providers must be licensed
by the Commonwealth. License applications must identify geographic
area of proposed service, name of LDC certified to serve the area,
and include sufficient information to indicate "financial fitness"
for providing proposed services. |
|
|
03/99 |
Standards of Conduct: Task Force
Report. Report proposes
standards of conduct governing issues common to both retail gas
unbundling programs and retail access pilot programs for electric
utilities. The rules address conduct standards for competitive
service providers, LDCs and their affiliates, and licensing and
filing requirements. Formal hearings are scheduled to allow comment
by all interested parties, with a hearing examiner assigned to
conduct all further proceedings. |
|
|
12/98 |
Number of Commercial/Industrial Customers
in WGL Pilot Increased, Case
PUE971024. The SCC approved Washington Gas Light's (WGL) request to
expand the number of eligible commercial and industrial customers to
include all applications received by 12/9/98, which is the last date
to apply for service beginning 1/1/99. The original program covered
10 percent, and WGL has received applications from about 16 percent
of the customer class. |
|
|
06/98 |
Approval of WGL Pilot
Program, Case
PUE971024. The SCC approved a 2-year pilot program that would allow
Washington Gas Light to provide delivery-only service to 10 percent
(20 percent the second year) of eligible firm bundled service
customers. Balancing service would be offered to suppliers on an
annual basis the first year and monthly the second year. Qualifying
suppliers must aggregate at least 100 dekatherms of average daily
contract quantities. |
|
|
03/98 |
Special Rate
Guidelines, Case
PUE970695. The SCC adopted guidelines for utility applications for
special rates for particular customers or customer classes.
Utilities must show the effect of such rates on total company
revenues, total company expenses, and the return on rate base (if
applicable), as well as the rate impact on other customers.
Applications will be reviewed on a case-by-case
basis. |
|
|
09/97 |
Approval of Commonwealth Gas Service Pilot
Program, Case PUE970455. The SCC approved a 2-year
pilot choice program for residential and small commercial customers
in the Gainesville area. The program will begin October 1, 1997, and
continue until October 1, 1999. Enrollment will be open rather than
limited to a particular period, aggregation service agreements are
to be included in the tariff as well as provisions that
participating marketers must respond to SCC data requests, and the
company is to conduct a balancing study "using daily load sampling
in conjunction with the pilot to gather information about customer
gas consumption in comparison with load profiles used by marketers."
The SCC also directed that a task force be established to develop a
code of conduct to govern retail gas unbundling.
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