The Wisconsin Public Service Commission (PSC) has initiated a proceeding to pursue development of a market-based approach to natural gas regulation (Docket No. 05-GI-108). A public hearing has been set for May 16. The PSC's goal is to remove barriers to competition and permit customers to choose their natural gas service. Under the model, the PSC would stop regulating a utility's natural gas costs when it finds that a competitive market has developed for a given class of service. (Only the service would be available on a nonregulated basis.) Customers would be responsible for obtaining services currently provided by the local utility.
The PSC's formal proceeding will involve three phases. The first phase will focus on financial or structural separation for utility gas-purchasing activities associated with serving regulated and nonregulated segments of the market. It also will examine how the PSC should unbundle the elements of natural gas service, and how it should define the long-run incremental costs.
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