The state's two largest natural gas suppliers said yesterday that they support a deregulation plan for the industry but cited a number of obstacles to bringing true competition to the business.
Representatives from Baltimore Gas and Electric Co. and Washington Gas Light Co. said they will work to implement the state Public Service Commission's deregulation plan, which is meant to encourage competition for the business of large industrial and commercial users.
"We believe this plan meets with the direction the industry is going on a federal level and fits with our vision of where local distribution will be in the future," said S. Edward Hargest, manager of BGE's gas planning department, at the PSC's first hearing on the deregulation issue. "We see this as an evolutionary process, not a revolutionary process."
In exchange, BGE hopes to unbridle itself from some regulations and take a larger role in natural gas brokerage, which it began in November.
The deregulation plan also has the support of various gas brokerage firms, including Broad Street Oil & Gas Co. and O&R Energy Inc., which have been attempting to penetrate the BGE-dominated market.
Under the PSC framework, which follows in the wake of a Federal Energy Regulatory Commission order, natural gas customers -- including residential users -- will eventually be able to choose between service providers in much the same way customers currently select long-distance telephone service.
Other states, including California, New Jersey and Oregon, have also begun restructuring their natural gas systems.
But proponents of the plan noted that several barriers exist to complete deregulation, including access to gas capacity, future rate regulation, the so-called "obligation to serve" that requires utilities to guarantee service to customers, and the availability of proprietary information held by suppliers and brokers.
The commission and several parties testifying added that limited competition already exists in Maryland, especially for the business of large-volume industrial users.
At the conclusion of the hearing yesterday, PSC Chairman Frank O. Heintz indicated further discussion would occur through a "round-table" format, with various segments invited to participate.
The PSC's framework calls for a report on the round-table discussions in July, with an initial plan for larger customers to take effect in November. Pilot programs for small commercial users and residential customers are expected to be created by November 1996.