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PSC drops $40m to offset winter bills

New AGL bill rates higher in winter, lower in summer

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When natural gas customers open their gas bills next year, they're likely to fall to their knees and curse the day mankind quit using fire to keep warm.

Come February, Atlanta Gas Light is changing the way it bills its customers. That's good news and bad news. The bad news is higher bills during winter. The good news is Georgia's 1.5 million natural gas customers will get a $14 break in February and March. Senior citizens will get even more help.

The PSC will provide that money by draining $40.9 million out of its Universal Service Fund, which now contains about $47 million. That money is intended to help soothe customers who will find that, unlike previous bills since deregulation, AGL is basing its charge on how much a household consumes each month.

Previously, AGL charged the same rate each month. But customers complained they received high gas bills during a time of the year when they used little or no gas.

"Customers were saying to the PSC, 'Hey, we're not using this gas we're being charged for.' The PSC talked to us about it, we listened and worked with the PSC to come up with a new rate plan," says AGL spokesman Nick Gold.

Customers will likely flood the PSC complaint hot line again, because AGL's new billing rate will show up for the first time on bills that are historically the highest of the year.

True, AGL's portion of the summer bills will be less than before, possibly 5 percent lower than last year's, but those winter bills are bound to be jaw droppers.

Commissioner Lauren "Bubba" McDonald, Jr., says AGL's base charge, compared to the previous year, could double during the cold months.

When you add AGL's doubled winter rates with the nationwide higher prices of natural gas -- it's twice the cost of what it was last year -- Georgians may want to ask Santa Claus for a winning lottery ticket rather than PlayStation 2.

"What this means is that at the same time the wholesale cost of gas is going up, the fixed-cost portion of your bill is also going to be rising in the winter," says Jim Hurt, director of the Consumer Utility Council, a division of the Governor's Office of Consumer Affairs. "We're very concerned about the timing [of the new billing plan]. We could see unprecedented bills this winter depending on how cold it gets."

But McDonald says the PSC is taking steps to ease the pain of opening those bills. "In order not to have that rate spike in February and March, the refund of $40 million to residential consumers out of the Universal Service Fund will neutralize [the higher bills]," McDonald says.

In other words, consumers would have paid the same amount throughout the cycle of a year, but the PSC decided to drop more than $40 million to help Georgians deal with bill day. The $40 million is coming from a fund that was established to help AGL expand and maintain its pipe system, and to help gas marketers subsidize their service to folks who can't afford natural gas.

Hurt says the $28 a month may not be enough to cover gas bills this year, and that there may not be enough money in the service fund to help those who really need it.

Natural gas marketers aren't exactly happy with AGL's new billing plan either; they fear it will make a natural gas bill more complex than it already is.

The PSC is already swamped with consumer billing complaints, and is cracking down on natural gas marketers who haven't gotten their billing system together. Customers across the state complained that their bills were too high, too low, arrived too late or haven't arrived at all.

One proposal before the PSC would void any bill if it was more than 90 days late to the customer, or if it was less than 90 percent accurate. If marketers continue to screw up their bills, they could be kicked out of the state, pay penalties of $15,000 per billing incident, or pay $10,000 per day until their problems are fixed.

AGL's new billing plan will "add complexity to billing when billing is the consumer's biggest gripe," says a natural gas marketing lawyer. "Marketers have already spent a lot of money educating consumers about the current way bills go out."

By the way, dipping into the fund is perfectly legal, McDonald says, and nothing new. The PSC also used the fund to give customers a refund in November, 1998, when AGL over-collected.

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