| Status: The State has one pilot unbundling program for residential gas customers.
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Overview: Almost all of the residential and commercial customers in Kinder Morgan, Inc.'s Nebraska service areas are participating in the State's only customer choice pilot program. Kinder Morgan (KM), which serves about 15 percent of the State's residential and commercial customers, initiated its Nebraska Choice Gas Program in April 1998 as a proactive step to unbundling natural gas services in the State. In the eighth year of KM's program, residential and small commercial customers in virtually all of the 180 communities served by KM were eligible to choose among three suppliers for their natural gas, one of which is KM's gas marketing division Kinder Morgan Choice Gas Supply. The other participating suppliers are ONEOK Energy Marketing Company and Public Alliance for Community Energy (formerly PACE and now known as ACE), a municipally owned, not-for-profit organization. Customers were required to make their natural gas supplier selection by May 1, 2005, for service from June 1, 2005, through May 31, 2006. Most customers in the program (64 percent) chose to purchase gas from KM's marketing division.
Until passage of the State Natural Gas Regulation Act in May 2003, Nebraska had a somewhat unique situation in which individual communities and municipalities, rather than a statewide regulatory body, regulated retail natural gas service. Now (since January 2004), the Nebraska Public Service Commission has the responsibility for overseeing the rates charged for natural gas service and also oversight of the terms and conditions of service. The commission opened a docket in June 2005 to investigate and adopt policies for administration of KM's consumer choice program and any other choice programs that might be offered by jurisdictional utilities for natural gas service in the State.
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| EIA State Data: In 2004, Nebraska had 497,391 residential and 57,087 commercial customers. They consumed 39 and 30 billion cubic feet of natural gas, respectively. The average prices paid for natural gas purchased from local distribution companies by residential and commercial customers were $9.06 and $7.60 per thousand cubic feet, respectively.
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| Eligibility/Participation in Retail Choice Programs:
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Status as of December 2005: Number of Customers
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Customer
Type |
Total 2004 |
Eligible
December 2005 |
Participating
December 2005 |
|
Total |
Percent of
2004 Total |
Total |
Percent of
Eligible |
Percent of
2004 Total |
|
Residential |
497,391 |
73,400 |
14.8 |
73,400 |
100 |
14.8 |
|
Commercial |
57,087 |
12,318 |
21.6 |
12,318 |
100 |
21.6 |
|
Total |
554,478 |
85,718 |
15.5 |
85,718 |
100 |
15.5 |
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Nebraska: Regulatory and Legislative Actions on Retail Unbundling
Summary: Individual communities and municipalities, rather than a statewide regulatory body, regulated retail natural gas service in Nebraska until passage of the State Natural Gas Regulation Act, effective as of January 1, 2004. In setting up its Nebraska Choice Gas Program, KN Energy (now doing business as Kinder Morgan) reached an agreement with each municipality. The company agreed to fund formation of a Municipal Oversight Committee, which would recommend any changes needed in the program and serve as a mediator in any disputes. Nearly all the communities in the company's service territory have voted to participate in the choice program.
The State Natural Gas Regulation Act is modeled after laws governing natural gas regulation in Kansas and repeals the Municipal Natural Gas Regulation Act, which had given regulatory authority of natural gas utilities to local governments. The act includes an option for municipalities and LDCs to negotiate rates for natural gas, but otherwise the Nebraska Public Service Commission (PSC) has the responsibility for overseeing the rates charged for natural gas service and also oversight of the terms and conditions of service. Utilities operating in the State must obtain a certificate of public convenience from the PSC. The PSC also has authority to insure that gas marketers operating in the State are properly qualified and capable of providing service. The law also creates a 5-member citizen's utility ratepayer board to represent consumers in rate proceedings.
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Regulatory and Legislative Actions
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Legislation |
5/03
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Governor Signs State Natural Gas Regulation
Act (Bill 790). Act repeals the Municipal Natural Gas
Regulation Act and creates a new regulatory structure whereby the Nebraska
Public Service Commission will regulate natural gas utilities, assuming
responsibility for rates charged for gas service and also the terms and
conditions of service. Act includes an option for municipalities and LDCs
to negotiate rates; otherwise the PSC will do so. Public utilities doing
business in the State must obtain a certificate of public convenience from
the PSC. The act becomes effective on January 1, 2004.
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Regulatory Action |
06/05
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PSC Opens Docket for Administration of Consumer
Choice Programs. PSC began an investigation into setting rules for
administering consumer choice programs in the State. The investigation
will explore the following issues: adoption of a standard code of conduct
for utilities offering consumer choice programs; educational information
about choice for consumers; annual reporting requirements for utilities
offering choice and for participating marketers; and whether and how to
calculate cost comparisons among suppliers for the benefit of
consumers. |
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7/04
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PSC Proposes Affiliate Rules.
ACE submits comments supporting rules, and notes
abuses when consumers are unable to differentiate between parent and
affiliate. |
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Municipality/ Community
Action |
5/05
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Customers Select Suppliers for 2005-2006 Choice
Program. Balloting to select a supplier for the 2005 choice
program occurred in April 2005. Selections were as follows: Kinder Morgan
Choice Gas Supply: 55.153; Public Alliance for Community Energy (formerly
ACE): 23,882; and ONEOK Energy Marketing: 6,683. |
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5/04
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Customers Select Suppliers for 2004-2005 Choice
Program. Balloting to select a supplier for the 2004 choice
program occurred in April 2004. Selections were as follows: Kinder Morgan
Choice Gas Supply: 60,004; Public Alliance for Community Energy (formerly
ACE): 22,340; and ONEOK Gas Marketing: 4,984. |
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5/03
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Customers Select Suppliers for 2003-2004 Choice
Program. Balloting to select a supplier for the 2003 choice
program occurred in April 2003. Selections were as follows: Kinder Morgan
Choice Gas Supply: 60,297; Public Alliance for Community Energy (formerly
ACE): 22,510; and ONEOK Gas Marketing: 4,066. |
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5/02
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Customers Select Suppliers for 2002-2003 Choice
Program. Balloting to select a supplier for the 2002 choice
program occurred in April 2002, with 86,151 customers returning supplier
selection forms. Selections were as follows: KM Gas Services: 38,950;
Kinder Morgan: 21,912; ACE: 21,338; and ONEOK Gas Marketing: 3,951.
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5/01
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Customers Select Suppliers for 2001-2002 Choice
Program. Balloting to select a supplier for the 2001 choice
program occurred in April 2001, with 86,669 customers returning supplier
selection forms. Selections were as follows: KN Gas Services: 41,366; KN
Energy: 23,995; ACE: 18,472; ONEOK Gas Marketing: 1,727; Midwest United
Energy: 969; and MxEnergy: 142. |
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5/00
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Customers Select Suppliers for 2000-2001 Choice
Program. Balloting to select a supplier for the 2000 choice
program occurred in April 2000. |
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5/99
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Customers Select Suppliers for 1999-2000 Choice
Program. Balloting to select a supplier for the 1999-00
choice program occurred in April 1999, with KN Energy announcing that
about 71 percent chose their current supplier. Nearly all communities (176
of 180) are participating in the program. |
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5/98
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Customers Select
Suppliers. Balloting to select a supplier for the 1998-99
choice program occurred between 4/17/98 and 5/1/98, with most (82 percent)
choosing KN Services, a wholly owned subsidiary of KN Energy. By the end
of March 1998, 165 towns had passed ordinances approving participation in
the choice program. |
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2/98
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Towns Approve Choice Program.
More than half (109 of 181) the Nebraska towns in
KN' service territory passed ordinances that allow customer choice in
their communities. KN customers can purchase gas from one of four
suppliers. The company will continue to provide bundled service to those
customers who do not choose a supplier. The utility also offers additional
services through a program called "Simple Choice" that allows customers to
purchase entertainment, communication, and energy services with "one call"
and one bill. |
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12/97
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Agreement Reached on KN Energy's Proposed Choice
Program. KN Energy and several Nebraska municipalities
reached an agreement on KN's proposed PGA rate increase and planned Choice
program. KN Energy agreed to fund formation of a municipal oversight
committee, which would recommend program changes and mediate disputes.
Municipalities will be able to participate as a supplier in the choice
program without having to open their own systems to competition. Towns in
KN's service territory will vote on whether or not to
participate. |
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