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Kentucky Resources Council, PO Box 1070, Frankfort, KY 40602 Phone [502] 875-2428

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PO Box 1070, Frankfort, KY 40602  Phone 502.875.2428, Fax 502.875.2845

KRC Supports E.On Request To PSC For Case On Natural Gas Unbundling  Posted: November 16, 2009

November 16, 2009

Hon. David Armstrong, Chair
Public Service Commission
Post Office Box 615
211 Sower Boulevard
Frankfort, Kentucky 40602

Re: E.On Letter of October 22, 2009

Dear Chairman Armstrong:

I am writing to you with respect to the October 22, 2009 Letter from Victor Staffieri of E.On U.S. in which Mr. Staffieri requested that the Commission open an Administrative Case to provide an open forum for exploring whether retail natural gas unbundling is in the best interests of Kentucky’s natural gas utility customers.

KRC, as you are probably aware, represents low-income individuals and community organizations on a range of natural resources, pollution, energy and utility policy issues. Many of our clients are among the most vulnerable of ratepayers, and any significant changes or disruptions in the reliability of service or pricing of natural gas that might result from the allowance of retail natural gas unbundling on a statewide basis would disproportionately affect their interests.

KRC concurs with E.On that there have been sufficient changes since the Commission last explored the topic of retail natural gas unbundling, including the experiences of state pilot and full-scale unbundling programs, and Kentucky’s own experience with the Columbia “choice” program, that could help inform an open discussion on whether Kentucky’s ratepayers would benefit from introduction of retail natural gas unbundling.

The experience of the current Columbia pilot is a cautionary tale suggesting that before unbundling is contemplated on a larger scale, the numerous issues of concern to the public, including the alteration of the “regulatory bargain” by which the utility is granted a monopoly service area in return for an obligation to serve; the likelihood that participating customers will, over the short and long term, actually save in gas costs; and those other issues identified by the Commission in Administrative Case 367, be thoroughly vetted.

For these reasons and those outlined in the October 22, 2009 letter, KRC joins E.On in asking that the Commission open an Administrative Case in which all jurisdictional utilities be made parties, and representatives of consumers, including low- and fixed-income consumers, and gas marketers be encouraged to participate.

Cordially,



Tom FitzGerald
Director

cc:

Hon. Jeff DeRouen, Director
Public Service Commission
Post Office Box 615
211 Sower Boulevard
Frankfort, Kentucky 40602

Hon. Jack Conway
Attorney General
State Capitol
Frankfort, Kentucky 40601

Victor Staffieri
E.ON U.S.
P.O. Box 32030
Louisville, Kentucky 40232

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