636 To the burnertip
For LDCs still dazed from last year's revolution, the prospect of totally restructuring their own business in 636 fashion may seem incredible. But the movement is real, invoking concepts like [open quotes]unbundling,[close quotes] [open quotes]comparability of service,[close quotes] and [open quotes]open access.[close quotes] And in it, marketers see their next great business opportunity. Large customers perceive a possible advantage in contracting for and managing their supplies through the entire pipeline/distributor infrastructure, particularly as an indirect means of cutting LDC margins by paying [open quotes]only for what they use.[close quotes] Producers also see the prospect of cutting LDC margins through [open quotes]competition.[close quotes] Those policymakers and economists that saw efficiency gains in turning pipelines into common carries presumably see the same potential with distributors. And some LDCs may be starting down that path. Is there a certain inevitability to this Will distributors be out of the merchant business in, say, five years Will the homeowner get a bill for transportation from PECO and a bill for gas from Enron Access Maybe. Certainly it is not inevitable. The revolution in telecommunications that gave us competition in long distance largely stopped with the baby Bells. Duly noting the California plan, electric utilities are sellers of commodities - not common carriers, as are water companies. Even the cable companies are exclusive sellers of what they carry. So the experience of other utility industries does not preordain that LDCs transport rather than sell gas. Thus, it is quite possible that the [open quotes]equilibrium[close quotes] for LDC activities pre-636 is the equilibrium post-636. That is, large end users would continue to transport gas on the LDC system while all others would continue to purchase a bundled merchant service from the LDC. But the jury will be out for the foreseeable future.
- OSTI ID:
- 6771647
- Journal Information:
- Fortnightly; (United States), Journal Name: Fortnightly; (United States) Vol. 132:13; ISSN FRTNE8
- Country of Publication:
- United States
- Language:
- English
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