Regulators OK Asset Identification Plan for ONG

by Russell Ray

The Tulsa World - September 1, 1999

OKLAHOMA CITY -- The Oklahoma Corporation Commission on Monday approved an agreement identifying Oklahoma Natural Gas Co.'s transmission and distribution assets, which are expected to be removed from rate regulation once competition for those services develops. 

Deregulating, or "unbundling," those services would allow them to compete in the marketplace. If the commission finds that sufficient competition exists for transmission and distribution services now provided by ONG affiliate ONEOK Gas Transportation, those services would be removed as a factor in determining consumer rates and ONG would have to bid for its transmission needs. 

The stipulated agreement was approved in a unanimous vote by the commission. ONG, commission staff, the Attorney General's Office and intervening parties agreed to the stipulation. 

OCC Chairman Bob Anthony said Monday's order is a "historic step in providing gas utility services by redesigning the traditional monopoly to bring the benefits of market competition to ratepayers." Don Sherry, ONG  spokesman, said competition must first develop before the assets are unbundled. Sufficient competition should develop by fall 2000. 

Determining new rates for ONG customers is next step in the process. A rate case is scheduled before the OCC in February. 

In July, the commission removed ONG's gas gathering and storage assets as a factor in devising consumer rates after determining sufficient competition exists for a competitive bidding process. That order allows ONG, beginning in November, to buy its gas based on competitive bids from suppliers. State officials hope competitive bidding will lead to lower gas rates for consumers. The July order is expected to save ONG customers about $11.3 million annually in gathering and storage costs. 

Monday's decision involved determining what transmission and distribution assets would be removed as a factor in consumer rates. 

The process was established by an earlier agreement approved in July that called for a $5 million credit for ONG's 680,000 residential customers. The credit will be applied to customers' gas bill starting Wednesday. The credit amounts to a one-time savings of about $7 per customer. 

© 1999 The Tulsa World


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