Georgia Power tries to force its way into gas market
Forget Mike Tyson in the Georgia Dome.
Georgia's real heavyweight bout has been waged for the last month under the Gold Dome.
In one corner, there's Atlanta Gas Light, Oglethorpe Power, New Power and the other gas marketing companies that have survived Georgia's painful deregulation process.
In the other corner, Georgia Power.
As usual, the battle is over money. More specifically, Georgia Power wants to be the company handpicked by the General Assembly to get millions in guaranteed profits.
Until the legislative session kicked off in January, few expected Georgia Power to muscle its way into the state's natural gas market. Then again, no one expected natural gas deregulation to generate such chaos in the first place.
Deregulation is easily the state's hottest consumer issue. Add to the equation the fact that this is an election year and by-golly the hard-working, good folks running our state are out to fix the industry.
Fifty-two bills pending in the General Assembly address the so-called natural gas crisis. Some, like Sen. Regina Thomas', seek to re-regulate the entire industry.
"Everything that was said in 1997 [about deregulation] has not been true," Thomas, D-Savannah, said during a committee meeting on her bill Feb. 14. "Prices are higher [and] there's not more competition. We weren't told the truth and I respectfully ask that you, as public servants, vote up or down on this."
As Thomas learned when her bill stalled in committee, however, the political or economic powers that be never really have considered re-regulation an option. None of last year's three legislative study panels on natural gas recommended re-regulation either. But one did come up with a more practical idea. On Feb. 5, the governor's natural gas task force released a final report that called for one company to be the designated gas provider to customers who had bad credit and were shut off by their previous marketer. Although that company would have to sell gas at a price set by the Public Service Commission, it would enjoy a guaranteed market and guaranteed profits.
The weird thing was that most of last week it looked like as if an electric utility was going to become the designated gas provider. On Feb. 11, a lobbyist for one of the companies working against Georgia Power said, "If Georgia Power's bill made it to the floor of the House and Senate, it would be passed, probably unanimously."
Despite the unified opposition of Atlanta Gas Light and the formidable companies that still market gas in Georgia, the power company is a daunting foe. Georgia Power alone lists three registered lobbyists in the state Capitol, and 13 more work for its parent, the Southern Co. In 2001, Georgia Power spent $4,446 on sports and concert tickets, lunches and dinners for legislators, according to the State Ethics Commission. And the company and its executives have long been heavy campaign contributors.
For the first month of the current legislative session, the company's lead advocate was Rep. Jimmy Skipper, a studious Democrat from Americus. As vice chairman of the powerful Rules Committee and majority whip, Skipper is one in a handful of younger lawmakers to genuinely crack the inner-sanctum of the House leadership. His proposal would have allowed Georgia Power to inherit a healthy chunk of the natural gas market: low-income customers who got their gas shut off for nonpayment.
Of the 50,000 consumers AGL claims lost service last year, only 3,000 to 4,000 applied for service from the current "provider of last resort," Infinite Energy. If Georgia Power got its way, it instantly would get those accounts. And while it was the only service obligated to sell gas to folks turned away from other marketers, under Skipper's draft plan, it also would have competed head on with the other marketers for the rest of the gas customers in Georgia.
In closed-door negotiations, Georgia Power reps told marketer lobbyists the company expected to woo 15 percent of all natural gas consumers in the state, according to a participant in those meetings.
Naming Georgia Power as the regulated provider is "one of the proposals that's on the table and has been for the last several weeks," Skipper said last week. "It's hard for anybody to really express opposition when no one has seen a bill in writing."
While it's true Skipper's bill hadn't been introduced yet, a draft has been making its way around the Capitol for weeks. The lobbying has been so intense that three lobbyists refused to comment on the record for fear of making the debate even more divisive.
The marketers and AGL argue the Public Service Commission should choose the regulated marketer through a bidding process.
From the first day of the session, the marketers held conference calls at least three times a week, sometimes three times a day. They drafted their own bills, sent revisions to the governor's office and generally played Lilliputans to Georgia Power's Gulliver. In a face-to-face meeting in the governor's office Jan. 17, marketers told Barnes that they'd pack up their bags rather than compete with Georgia Power.
By Valentine's Day, a gas company representative was predicting the House would pass Georgia Power's bill, but he said they didn't have the votes in the Senate any more.
In the final push to produce a bill, Gov. Roy Barnes stepped in to work with Skipper, according to several sources. Barnes had been in on the action — albeit from a distance — since the very beginning.
And while politically it's the in thing to trash AGL because of the deregulation debacle, Barnes may have a soft spot in his heart for the company. Two people, one lawmaker and a lobbyist, pointed out that Barnes may have some motivation to help AGL: AGL's law firm, Long Aldridge & Norman LLP, is a big-time Democratic party supporter, and one of Barnes' best friends, former state School Board chairman Otis Brumby Jr., sits on the board of Atlanta Gas Light's parent company.
By Friday, Skipper was busy hammering out the details of the bill everyone had been waiting for. Asked if Georgia Power or AGL would be designated the regulated marketer, or if another method was devised to select the regulated marketer, Skipper wasn't ready to say.
"We're talking with everybody," he said, "lawyers from the governor's office, the folks in the Senate [and] the folks with the marketers."
As CL went to press late Monday, Skipper was meeting with marketers and other lawmakers. Skipper wanted more feedback on the draft of a bill that Barnes himself might push. It would establish a regulated marketer limited to providing service to customers who were disconnected; that regulated marketer wouldn't compete with the other marketers.
Once the bill is introduced (presumably this week), it could be altered by lawmakers, who in turn can be influenced by lobbyists.
Ed Holcombe, Georgia Power's lobbyist, referred inquiries to John Sell, spokesman for Georgia Power.
"We're in a wait-and-see mode at this time until we see what the governor actually proposes," Sell says. "We've said all along that we're presenting ourselves as an option, and if that's the option chosen by the legislative process we'll proceed."??