PSC: Nonpayers account for 12 percent of gas bills

Posted 7:15AM on Thursday 17th January 2002 ( 23 years ago )

ATLANTA - About 12 percent of the natural gas bills paid by Georgia consumers is due to those who have not paid their bills, the Public Service Commission staff says. The state's top four gas marketers had bad debt expenses of $84.5 million for the first nine months of 2001, according to a staff report prepared for the commission. The draft report said bad debt encountered by the non-regulated marketerss is higher than that by Atlanta Gas Light Co. before deregulation, when AGL was responsible for gas sales. Typically, AGL expensed 0.5 percent of its revenue for bad debt, compared with 7.5 percent for the top four marketers from last January through September. The marketers wrote off $30.1 million during that period and set aside $100 million in reserves, according to the PSC staff. At the same time, the four increased their markup over wholesale price from 19.1 cents per therm in December 2000 to 43.1 cents between February and October 2001, the report said. The staff analysis found that about 13 cents of the increase could not be attributed to bad debt expense. Bad debt accounted from 11.6 percent of average December bills from the top four marketers or $14.32. Another report being scrutinized by the PSC said weak competition appears to be another factor keeping gas prices high in Georgia. The study by the National Regulatory Research Institute at Ohio State University found that the top four marketers together serve 95 percent of the 3-year-old deregulated market. The report's author, Ken Costello, senior institute economist, found ``no conclusive evidence that marketers have engaged in anti-competitive behavior, either overtly or tacitly.'' But PSC price disclosure requirements may have allowed marketers to shop the competition before setting prices, Costello added.

http://accesswdun.com/article/2002/1/200044