Natural Gas Executives See Need to Educate Regulators

Article excerpt

By Ronda Fears

Journal Record Staff Reporter

Elevated competition in the natural gas industry and changes in the federal regulatory framework need to be explained to state regulators, members of the Oklahoma Gas Association were told Thursday in Oklahoma City.

"We've got to do a better job of explaining what's going on in our industry" to state regulators, said Mike H. Means, president of Arkansas Louisiana Gas Co., a division of Arkla Inc. of Shreveport, La.

Means spoke at the gas association's annual meeting, which concludes today in the Radisson Inn. Membership of the association is chiefly gas utilities, pipelines and supply vendors.

Means said two of the prominent regulatory issues facing the gas industry have to do with Federal Energy Regulatory Commission Order 636 and integrated resource planning. But, he added, regulatory reform in the form of "incentive ratemaking," which does away with traditional rate cases, has been embraced in several states like Louisiana.

FERC adopted Order 636 in April 1992 as the last phase of separating the functions of interstate pipelines, making the lines common carriers. The transition began in the mid-1980s; full implementation is required by year end.

As a result, more regulatory oversight is placed at the state level because supply and delivery arrangements are now the responsibility of the local distribution companies, or gas utilities.

There also are new guidelines for states to use in utility regulation, such as integrated resource planning, that came out of the National Energy Policy Act of 1992, Means noted. Integrated resource planning is designed to maximize efficiency of fuel sources by utilities _ gas and electric _ and foster energy conservation. One component of the planning concept is based on procuring fuel supplies at the least cost, regardless of other factors like supply security.

In Oklahoma, the adoption of integrated resource planning guidelines is behind many other states; there is an ongoing case pending at the Oklahoma Corporation Commission. …

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