Originally created 01/18/01

Panel halts natural-gas cutoffs

ATLANTA - No Georgia residential natural-gas customers will have their service cut off for nonpayment of bills until April 1, the state Public Service Commission voted unanimously Wednesday.

The commission split 3-2 on another emergency rule that, for the next 60 days, prohibits gas companies from blocking former customers with unpaid balances from switching suppliers. Chairman Lauren "Bubba" McDonald and Commissioner Stan Wise voted against that proposal, saying it could lead to higher gas prices for all customers.

No one objected to the moratorium on disconnections during the coldest winter in decades. But several representatives of gas companies told the five-member commission during a 2´-hour hearing that allowing delinquent customers to change suppliers at will would drive up costs to cover their bad debts, resulting in higher rates for everyone.

"If people do not pay SCANA Energy, we have to disconnect," said attorney John Stuckey, representing the second-largest Georgia marketer. "We would not be in business long if we gave away a commodity. Our shareholders won't allow that ... This get-away-free rule is not the answer."

But the Rev. Michael Langford, the president of the United Youth Adult Conference, told the commission that struggling customers should be allowed to seek a cheaper source of fuel.

"We cannot depend on these companies to be the watchdogs over themselves because we have heard today they are only concerned about profits, profits, profits," he said.

Atlanta Gas Light Co., which distributes the gas on behalf of the competing marketers in Georgia, reports that 45,000 customers are being blocked from switching because they owe their previous companies.

Until Wednesday, the commission had not taken a position on the industry practice of blocking transfers. Representatives of each gas marketer had simply met with commission staff to strike a gentleman's agreement that customers owing one company would be allowed to transfer to a second company, but not to a third, fourth or fifth.

The idea was to give consumers in a dispute a chance to move to another company without allowing deadbeats to simply skip out on balances with every marketer in the industry.

The commission has enacted rules that allow suppliers to disconnect customers who don't pay for 45 days, as long as the 24 hours after termination are predicted to be above freezing.

There is a backlog of 8,400 customers scheduled to be disconnected, but only one day last month was warm enough across the state to allow it. Atlanta Gas crews generally disconnect only 500 to 700 customers in a given day, which gives them time to reconnect within a day if the customers satisfy their supplier's accounting departments.

Wednesday's action means no one will be disconnected until spring.

The practice of blocking transfers, though, could be a violation of federal anti-trust laws, Emory University law professor Thomas Arthur said.

"At first blush, it does sound like it is a restraint of trade," he said. "In cases like this, courts have been sort of wishy-washy."

Rulings in several similar cases have prohibited competing companies from agreeing among themselves to boycott certain customers. On the other hand, he said, other courts have said such agreements that don't stifle competition or control prices are permissible.

During the next 60 days, the commission will evaluate the effects of the emergency rules. After that evaluation, the panel could vote to make them permanent, allow them to lapse or make other changes.

Reach Walter C. Jones at (404) 589-8424.


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