WASHINGTON GAS TESTIMONY

TO THE JOINT SUBCOMMITTEE EXAMINING ELECTRIC UTILITY RESTRUCTURING IN THE COMMONWEALTH

August 18, 1998
David E. Schwengel
Area Manager, Public Affairs

BACKGROUND

Washington Gas agrees that the Consumer Protection issues identified by the Subcommittee are critical to the successful transition to full competition in the electric utility industry, and offers additional issues that the Consumer, Environment and Education Task Force may wish to use as a starting point for its discussions. Efforts should be made to define each issue completely to ensure universal understanding of the terms and related points. Recognizing that the Structure and Transition Task Force has already begun to address some of these issues, Washington Gas believes that discussion of these can continue and expand in the Consumer, Environment and Education Task Force. Washington Gas also continues to support the involvement of the State Corporation Commission (SCC) in the detailed work of restructuring.

Washington Gas believes in customer choice and looks forward to working with members of the Subcommittee and Task Forces to address issues related to consumer and environmental protection and education.

CHOICE IN NATURAL GAS

Our experience has shown that consumers want and value choice. Over the past three years, our residential and commercial pilot programs in Maryland have had healthy subscription rates. Some programs have reached and even exceeded projected maximum capacity:

Residential

• November 1996.....6,200 participants (v. 6,000)

• November 1997.....18,100 participants (v. 25,000)

• September 1998.....targeted for 100,000 participants

Commercial

• June 1996.....1,700 participants

• June 1997.....5,100 participants

• June 1998.....targeted - all 25,000

SUGGESTED ISSUES FOR TASK FORCE CONSIDERATION:

Washington Gas proposes that the following additional issues be addressed by the Consumer, Environment and Education Task Force:

Marketers and Suppliers

• What requirements will be imposed upon marketers to provide an adequate level of consumer protection, including a review of licensing, bonding and insurance?

• Who should oversee the licensing process and ensure credit worthiness of marketers? In Maryland, Washington Gas ensures that suppliers are qualified.

• What are the rules for communicating to customers?

• What requirements for disclosure of terms and conditions of service are required, including requirements for verbal and written notice?

Antifraud Measures

• The Consumer Affairs Division of the Attorney General's Office and the local governmental Consumer Affairs offices should continue to provide consumer information and protection.

Public Benefits and Outreach Programs

• Washington Gas maintains that existing programs and administration of such, including the federally administered Low Income Housing Energy Assistance Program (LIHEAP), should continue.

Demand Management Practices (DSM) and Other Energy Assistance Programs

• Successful energy efficiency programs are currently being offered by the private sector. As a result, traditional DSM activities may no longer be needed.

• If deemed necessary, costs should be recovered through a non-bypassable wires (universal service) charge.

Generation Fuels Disclosure

• Marketplace forces should drive the development and disclosure of marketers' use of renewable ("green") energy sources.

Aggregation

• How can a variety of customers benefit from aggregation?

Legislative Oversight Committee

• Washington Gas supports continued legislative and SCC involvement in restructuring the electric utility industry to ensure the best choices for businesses and residents in the Commonwealth.

Education

• Washington Gas serves a multi-jurisdictional service territory. As we have expanded our pilot programs in other areas, we have gained experience in consumer education and consumer protection that we would be pleased to share with the Joint Subcommittee and Task Forces.