HB 1325: The Biggest Screwing of Georgia Gas Users Since The 1997 “De-Regulation Bill”
by Bill Simon
Senate Majority Leader Tommie Williams (R) is quoted in Saturday’s AJC as stating “[HB 1325 is] not a bad bill…It just hasn’t been explained.â€
Wrong, Senator Williams. Not only is HB 1325 a bad bill, but, with nearly the entire Republican caucus of the House voting in favor of it, it becomes a VERY bad bill. Allow me to explain why and we’ll see if (at the conclusion) you readers of this agree with Senator Williams or with me.
As a minor aside, I’m not your normal political hack. I don’t have a poly-sci degree. Or, a law degree. Or, any liberal arts degree.
What I do have is an undergraduate degree in mechanical engineering from Georgia Tech and a master’s degree in finance from Georgia State University. Two disciplines that require a person to learn a subject by learning the theory behind the concepts, learning a bunch of mathematical formulas to apply the concept to come-up with a solution, and then the experience to know if the solution makes sense or something’s out of whack with the original assumptions.
The practice of politics requires no discipline of logic at all. The enactment of legislation requires no logic at all, as seen by the garbage that comes out of both the state legislature and Congress over the past decade. A politician can make a statement of absolute nonsense, but, because he/she is surrounded by fellow politicians who presume that because he/she “sounds” like he/she knows what he/she’s saying, then it must be logical and therefore a good idea.
If you are a Republican member of the state house who voted in favor of HB 1325 (Hint: Every Republican house member but Rich Golick, Robbie Mumford, Mack Crawford and Fran Millar, who was excused, did vote for it), and you don’t like either what I’ve said up to this point, or you don’t like what I will say later, too bad.
AGL Resources – Part 1
AGL Resources used to be known as “Atlanta Gas Light.” After the 1997 bill that “deregulated” (sic) the natural gas market in Georgia was enacted, Atlanta Gas Light morphed into a large holding company called “AGL Resources” whereby their primary business model became the distribution of natural gas.
By “distribution,” I mean only the piping and storage systems used to transport the natural gas. They are NOT involved in the actual “supplying” of the gas, only the distribution of the gas. It is crucial that you understand this in order to understand why you’re about to get screwed by the ignorance of your legislature.
To explain this a little better, I will open my monthly gas bill…I invite you to read along with your own bill to better understand what’s going on…because it is crystal clear that by their support and votes in favor of this bill, the house legislators who supported this bill have absolutely ZERO clue as to what Atlanta Gas Light/AGL Resources actually does in order to generate the most revenue for themselves.
Line #1: “Gas South Natural Gas Supply”. Gas South is my “supplier” of gas. Whoever you have your service with is who your supplier is.
There are 2 charges that I directly owe Gas South for, the “Supply Charge” and the “Customer Service Fee.”
The Supply Charge is the money I owe for actual therms used. The Supply Charge is directly related to the market rate of the gas. It is a variable cost.
The Customer Service Fee is a flat, fixed-rate I pay every month, regardless of my usage amount.
Now…under the 2nd heading of charges, Atlanta Gas Light’s name comes-up. These charges are only for the use of the pipeline system that transports the gas. These charges are NOT affected in any way by the market price of gas. These are charges decided by AGL based on the volume of gas flowing through the pipeline, not the cost of the supply of the gas.
The cost of the supply of the gas is what everyone really screams about, not the pipeline costs. My pipeline distribution costs were a whopping $20 last month. I can assure you that wasn’t the largest component of last month’s gas bill. It was the Supply Charge.
In a free marketplace, if the quantity supplied outpaces the quantity demanded, prices will (usually) come down. But, you can only increase the supply of quantity if you physically add more of a good to the marketplace.
If your marketplace is the supply and demand of bananas, adding more roads so tractor trailers can take a shorter route to ship-in bananas DOES NOT increase the quantity of available bananas. It only provides, perhaps, a more efficient delivery system of the bananas.
However, the AGL lobbyists are playing a game of deception when they convinced the sponsors and supporters of this bill that HB 1325 will directly help supply when, in fact, it won’t do a thing to boost supply.
HB 1325, you see, requires me, and anyone else in this state whose home has a connection to it from Atlanta Gas Light’s piping system (i.e., a residential gas user), to personally pay for a $300 MILLION PIPELINE for AGL! I’m not kidding.
The only thing this new pipeline will do is provide more capacity…that is, the potential to pump more gas through the system.
Having the ability to distribute more gas is not the same thing as supplying more gas. So, there is no way that the market price of therms used eight years or so into the future (the time period bandied about as the time to construct the pipeline) can be promised to be “lower” because, no matter how large you build a distribution system, it does not, in any way, affect the market price you pay per therm to heat your house, wash your clothes, etc.
And, right now, from what I understand, AGL has capacity already going to waste. Meaning, they have excess capacity that they cannot fill now.
But…based on AGL’s theory, if they have excess capacity, that means they have a lot of supply coming and prices should be driven down. Do you see your price per therm decreasing? No? Well, AGL Resources’ lobbyists must be lying on their claim then that if they have more capacity to distribute, then you’ll have more supply. (Wouldn’t be the first time a lobbyist lied, would it? )
Furthemore, all this talk about Liquified Natural Gas is one big smokescreen from AGL. Why? Because, again, they are not in the business of supplying gas…they only distribute gas.
AGL Resources – Part 2
AGL Resources is a publicly-held corporation. Publicly-held by shareholders, not rate-payers. Not publicly-held like customers of, say Cobb EMC, are “shareholders” of the corporation, but shareholders numbering in the thousands of people and entities who want the stock price to be maximized.
Publicly-held in the sense that they have a trading symbol on the New York Stock Exchange. It is “ATG.”
Publicly-held in the way that, like every other publicly-held corporation, they have a requirement to make money, AND, most importantly, pay dividends to the shareholders and interest to the bond holders.
Why am I repeating that they are “publicly-held?” Because it is very, very crucial that you understand that before I continue. It’s NOT a “public monopoly.” It’s a “publicly-held, regulated monopoly.”
Publicly-held companies, like private companies, have a thirst for capital, whether it is working capital (to pay for short-term debts and payables) or financial capital (to pay for long-term capital projects). With AGL, one presumes they manage their working capital well enough so that this bill would not be a sham job to try and get us to pay for their current debts.
Publicly-owned entities usually have a huge advantage over private entities in the acquisition of new financial capital: Because they are publicly-traded, they have ready access to the financial trading markets. Issue more stock, issue preferred stock, issue debt…whatever.
If they have a project where they need to construct a new asset, they should be able to invite their trusty investment banker into the corporate offices and tell them “Hey, we want to build this pipeline, and we need help financing it. Can you help us?”
And, then the investment banker would proceed with a concept called “due diligence” in which the banker asks a series of questions and demands a series of financial models that demonstrate how much money this new endeavor will cost and how quickly will there be a return on the invested capital to re-pay the debt. Or, add enough to the profit line of the corporation to demonstrate that the investment of funds meets or beats the company’s minimum rate of return required for capital projects.
SO, do you think that if AGL, et al. really had a viable project in mind with constructing this $300 million pipeline that they would have ANY problem in securing the capital from the normal markets? No, they wouldn’t…if, that is, it was actually going to be a money-maker for them.
So, Ladies and Gentlemen of the voting public, it should be very clear that if AGL is not willing to risk their own capital, their own money, or their own debt rating to construct this pipeline, and, not even TRY to face the investment banker who would ask FAR more questions than people like the House sponsors of this bill (i.e., Jeff Lewis, Speaker Glenn Richardson, Speaker Pro Tem Mark Burkhalter, House Majority Leader Jerry Keen, Don Wix) would ever begin to ask, WHY should we, via a compulsory monthly fee of $3 per month for 8 years, be required to pay for this pipeline?
In short, it is utterly insane. It is also several other things as well. Requiring the users of a service to finance the construction of a pipeline for a publicly-held corporation amounts to a modern-day form of “collectivism.” All of a sudden, we individuals are going to be required to financially pay for something they cannot get anyone else to pay for.
Conclusion
So, I believe Tommie Williams’ assessment of this bill is wrong, wrong, wrong. It is a very bad bill.
I highly applaud Representatives Rich Golick, Mack Crawford, and Robbie Mumford, all Republican, for voting NO on this outlandish bill.
I am extremely disappointed in the actions of several representatives who supported this bill whom I THOUGHT had a modicum of common sense to vote against it.
I highly recommend that those of you who understand what I’ve said here, and the effect of the passage of this legislation, proceed to ask those Republican representatives who voted for the bill this question: Are you stupid, naive, or are you on the take to have supported this bill?
“On the take” means you’re getting fringe benefits from your support of the bill. Fringe benefits in the form of pay-offs of cash, favors, and/or information that you can use to enrich yourself exclusively. (I am 99.9995% certain that at least one of the state house backers of this bill fits the definition of being on the take from AGL Resources or any one of their 14 some-odd highly compensated lobbyists.)
If they fit the “stupid” category, I fear their stupidity is terminal at this point and you should just give them a stuffed bunny rabbit and a lollipop and wish them the best of luck.
If they fit the “naive” category, they have the potential to be educated enough not to repeat this error.
If they are “on the take,” then they will, eventually, be caught red-handed like so many politicians before them (e.g., Robin Williams, Charles Walker, etc.), and that will be a day of celebration. Because, the last thing we need is any more sleazy, crooked politicians in office in this state…Republican or otherwise.
Peace, out.
March 26th, 2006 at 6:43 am
Three Republican house members voted NO on the gas line rate hike bill:
Mack Crawford
Rich Golick
Robbie Mumford
March 26th, 2006 at 8:17 am
I’m not dumb or stupid, niether am I well education. I understood every word in this HB 1325. I am a senior citizen on a very low income. It sounds silly that $3.00 per month me. BUT IT DOES! That is $36.00 per year. If every company like Bell South, EMC, and your water company added only a tee tiny small $3.00 per month, that’s 4 utilities x 3. = $12. per month or or $144.00 PER YEAR. NOW the other utilities haven’t asked for a tee tiny $3. But this could be the beginning of “stupid, naive, or on the take” to be “stupid, naive or on the take” again and again. after all IT MUST FEEEL GOOD to the legislators to do such a thing.
March 26th, 2006 at 8:50 am
Neil, thank you! I will promptly correct!
March 26th, 2006 at 9:05 am
Dot, you are exactly correct. In fact, Georgia Power is patiently watching to see if this bill gets passed because they have a nuclear plant they’d like to increase the capacity of.
And if our government leaders are STUPID enough to give this gift to AGL, then they will be setting an incredible precedent whereby the ratepayers will be required to finance everything under the sun that the utility companies want to do.
March 26th, 2006 at 11:15 am
Bill,
Your article provides the needed details to shine the light of truth on another shady utility deal. Citizens need to wake up and take the time to learn about these issues before the additional line item is on the utility bill. You can be assured my State Rep and Senator will hear from me and my displeasure regarding HB 1325. Thank you for making me aware!
March 26th, 2006 at 11:40 am
Bill, The Repubs Elites have been burning the midnight oil staying up with the special interest lobbyists on how they can lay their big capital projects off on the public via their monthly bills.
If they really want to lottery…where everybody gets a chance to get ‘their deal’ in the hat.
I am not kidding here. The reasoning here is that people buy $3 in lotto tickets with just a slim chance of getting anything back…’so we can pattern our deal like this…the difference being they are forced to buy the lotto tickets.’
We need a legal opinion REAL QUICK on how to file a law suit on this.
Jim Dean
Heritage TV
March 26th, 2006 at 11:45 am
Make that call/e-mail to them soon, Jim. I talked to Wendell Willard yesterday who confidently told me that “there are 3 more days” to get this bill back into circulation in the State Senate.
SO, Burkhalter, Willard, and Richardson may be looking to “horse-trade” some crap on the budget in order to force the senate to put the bill back on the agenda.
If anyone’s going to contact their senators, do it now.
March 26th, 2006 at 11:53 am
I don’t purchase gas from AGL…will this bill cost me anything in the future? I am also opposed to providing big companies with guaranteed funds when they are simply enlargin their own facilities for future profits for them…not to save the general public funds in the future..
March 26th, 2006 at 12:00 pm
I don’t believe so, Calin. The way the legislation is written is that they can only collect the fees through the gas suppliers. So, if you do not use natural gas, and pay a marketer now, you will not pay any fees.
March 26th, 2006 at 12:56 pm
Good article. A little long. I know you need to set the background, but to get enough people to really read and become part of the process, the article needs to be just a tad shorter and more direct in saying that this bill is best described as a corporate executive earning a million dollars a year reaching into the pocket of the lowest paid employees to give him/her self a raise at $3.00 per month per employee having used the legislature to push through a labor law that allows the robbery.
Robbing the poor to pay back the rich for political support is fast becoming the norm at all levels of government. This type of political behavior is immoral whether you believe the supporters are naive, stupid or on the take. Using vital public utility services to commit this robbery should be viewed as a felony.
March 26th, 2006 at 2:10 pm
Pat,
I appreciate your view, but an opinion without the proof (and, the logic) to back it up becomes just another opinion in the wind.
March 26th, 2006 at 2:48 pm
The Bill is yet another rip off of the public. The bill we needed and I asked Representative Sharon Cooper to address would deal with the fact that Southern Company pays the lowest price for natural gas under what was intentionally mislabeled deregulation. It was actually regulation in favor of Southern Company with sponsorship from Sonny Perdue.
Southern Company set up a natural gas company for themselves that Cobb EMC was considering buying last year. I have not heard what happened to that idea. I was suspicious as Southern Company has a habit of selling their dog assets and why should we be the ones buying them? The most efficient use of natural gas is point of use water heaters, furnaces, stoves ECT. No capital out lay for generation plants, transmission lines would be needed. We should all be paying the same price for natural gas. Now Southern Company pays the lowest price then industrial users businesses and the home owner pays the highest price.
Do SUV drivers get a discount based on the fact that they are burring more gasoline? Do we charge more to those that drive efficient cars because they buy less gasoline? The largest user of natural gas is Southern Company. They already pass on surcharges of increased natural gas costs in our electric bills. The EMC’s in the state buy power from Southern company in large blocks and they to pass on the surcharges to people who buy electricity. After air conditioning / heating the appliances that uses the most energy is the water heater, clothes dryers and stove. I chose gas appliances when I built before deregulation based on efficiency and serviceability. We have all been cheated by Southern Company’s lobbyists in 1997. Enron the other player in price manipulation in the energy sector is still in the courts.
When are we going to get any one in the legislature to represent the common good rather than the corporate interests? AGL is following in Southern Company’s foot steps. The developers have a bill of the same nature in the works also allowing them to use tax free municipal bonds to build infrastructure for new projects then hang the debt on those that would buy their housing product. How fascist is this state and country going to get? Are they going to start selling Kia’s built here for $5,000 if we prepay them. Refers to Hitler’s VolksWagon scheme (peoples car) to raise money for his war.)
March 26th, 2006 at 3:00 pm
The passing of this bill is a waste and it will not lower bills. This will not add to a surplus of gas and drive prices down. The gas price is set by the market not the company. This passage of the bill will open more loop holes for companies to bypass the PSC. This is all the bill is doing since AGL was shut out last year. By the way can anyone think of the person who started this mess in the 90’s. As Craig said it was Sonny our fearless leader. The Southern Company deal I heard was a done deal and AGL was left staring. If anyone wants to know the market price for a therm it is $7.30. If you locked in a fixed price and pay more then $1.40 I would change your plan. It all comes down to 3 people who we do not need to vote for again.
March 26th, 2006 at 5:55 pm
I am taking what i call “the medicinal stance” on this: would you rather address this now, or wait 10-15 years and let your kids or grandkids deal with this as a major problem???
First, NO–I am not a lobbyist, nor am I connected with AGL; BUT, I am politically involved, I have done a LOT of research, and I do live in rural GA, where El Paso Gas is about to put a new pipeline through from Elba Island to Anderson, SC–so I’ve been in neck deep with the utilities.
I do understand HB 1325 MAY NOT lower the cost of gas, but the line will shift distribution some from the Louisiana/Texas area to the Elba Island facility (which is supplied with mainly South American LNG-liquified natural gas)off of the Georgia coast; this would help any future problems with distribution, should another Katrina hit and cause disruption to the Gulf of Mexico rigs and facilities.
Sadly, the only way prices would drop, is if this line (wholly owned by AGL) could cut the costs that the REAL distributors (El Paso, Transcontinental, Southern Natural Gas, etc.) charge for transport from the gulf and or elba isle facilities to AGL distribution lines (since they do buy the gas from others–who actually set the price).
The only real problem I see with this bill and line is that if the customers(citizens) are paying for this, then why is the line still AGL property–ie. PRIVATE, PROFIT MAKING property? Shouldn’t it be public property, then GA should take some of the profits for this gas, be it through taxation, or other means???
March 26th, 2006 at 7:32 pm
Would it be quicker to list the Democrats who voted gainst the bill, or the Democrats who voted for it? You had mentioned Don Wix as a supporter, Bill.
March 26th, 2006 at 7:39 pm
Democrats voting for HB 1325
Ellis Black
Ron Borders
Bob Bryant
Mickey Channell (rumored as soon to switch)
Mike Cheokas
Johnny Floyd
Gerald Greene
Keith Heard
Charles Jenkins
Jane Kidd
Bobby Parham
Butch Parrish (switcher?)
Dubose Porter
Alan Powell
Richard Royal (switcher?)
Stan Watson
Don Wix
March 26th, 2006 at 9:13 pm
Bill, Last week the AJC discolosed that a new large capacity pipeline for LNG was already in the works. It is being funded without the publics forced participation by the government. What is the real story here? Which corporate interests are fighting? Is this a red herring to stir up the political divide?
If all users paid the same market price for the comodity every one would have the financial incentive to conserve. Currently Southern Company is being subsidized by homeowners for natural gas conversion of their plants. That is what has driven the price through the roof. Now it appears a different off shore cheaper source has been found that can be surcharged to electric bills. Your comments welcome.
March 26th, 2006 at 9:15 pm
Wonder how many stock options AGL Resources have promised OR already issued to Mark Burkhalter?
Because, if this bill passes, you will see the stock price jump-up significantly. Why? Because if you can build an asset and be guranteed that you will be reimbursed 100% of the cost by someone else, before you even try to generate revenue from that asset, where is any risk to your company for investing in that asset?
In this case, ZERO risk of invested capital by AGL translates into, literally, infinite return on capital.
That would make me want to invest in the stock, for sure. It would make Mark Burkhalter sure as hell jump on pushing this bill to the degree I have heard he is pushing it if he (and other co-sponsors) was given some FAT stock options by AGL, wouldn’t it?
March 26th, 2006 at 9:18 pm
The LNG line in the works, Craig, I believe is being built by another company, Southern Natural Gas, and being built with their own money with no guaranteed cost recovery from the ratepayers.
People should be asking their legislators that if Southern Natural Gas can invest their own $1 billion into building pipelines in Georgia, and they are also a publicly-held utility, why can’t the whiners over at AGL Resources pay for their own pipeline with no guarantees from us?
March 26th, 2006 at 9:23 pm
Note to Amelia:
You have it correct. It may be a great idea to build the pipeline, BUT it should not be financed by us, the ratepayer. AGL should be able to find their own capital to build it at no risk to us.
If we pay for it, then we SHOULD own it and have much less transportation costs on piping anythign that runs through it. But, that’s not the deal being offered.
March 26th, 2006 at 10:12 pm
Bill, Did Cobb Energy buy Southern Companys gas franchise? Deregulation saddled homeowners with extra costs for natural gas and allowed Southern Company to compete against its former supplier AGL paying a artificially lower price that is subsidized by the citizens of Georgia. Did you know that the PSC has no power to see that customers are only billed 12 times in a 365 day year as before deregulation. My conversion date was January 6th now it occurs in November. I was billed 13 times for the period January 6th through January 5th. It is past time to for the legislature to put the leash back on the Southern Pit Bull. A muzzel on its lobbists would also benefit the public good. The same cartel that controls Southern Company controls Exxon Mobile, Coal suppliers and the Railroads that haul the coal to The Georgia Plants.
We need to replace most every legislator in the state especially the senior and leadership positions.
March 26th, 2006 at 10:15 pm
You are correct also about the other line too, it is fully funded by Southern National Gas/El Paso Gas; and I know that they have been working against the AGL bill–for obvious reasons, such as cornering the market.
One big difference to the AGL intra-state line is that the GA PSC will regulate the flow, where with Southern Natural, they have to go through FERC to get approval with rates and flow, since they are interstate lines. I’m not sure, but it seems like a line that is only PSC controlled may have less overhead with regulatory costs, than say the ELBA3 line coming through, which could mean lower costs (but, that is a guess on my part).
FYI–you can check out http://www.elba3.com to see the project specs of the line coming through Georgia to Anderson, SC.
March 27th, 2006 at 5:58 am
Thank you, Neill. It seems a solid majority of House Democrats were still against it. That’s encouraging; since we’re taking back the state in ’06, we’ll be able to repeal this boondoggle.
March 27th, 2006 at 7:50 am
Craig, I don’t know the answer to that question on who bought who.
March 27th, 2006 at 2:14 pm
“You have it correct. It may be a great idea to build the pipeline, BUT it should not be financed by us, the ratepayer. AGL should be able to find their own capital to build it at no risk to us.
If we pay for it, then we SHOULD own it and have much less transportation costs on piping anythign that runs through it. But, that’s not the deal being offered. ”
Bill-
A couple of points:
1. If AGL is regulated and capped at how much profit they can make, then what incentive would they have to invest in infastructure in the State of GA? The regulated monopoly is a double edged sword, it’s not just a windfall for AGL.
2. We pay for things all the time, but don’t get ownership of the corporation that we buy them. For instance if Wal-Mart built a new IT Center and raised their prices on CD’s to pay for it, you would get to own some of the IT Center everytime you bought a CD.
Before you make the statement, “That’s different Wal-Mart is not a monopoly” Just remember that AGL is capped on the ROI they can make, so what is the incentive to make huge investments if they don’t have assurances they’ll recoup the investment. If the pipeline was sucessful with AGL making the investment with shareholders money, then the PSC could force them to pass 100% of the savings on to consumers. If AGL makes 100% of the invesment, but has to pass on the savings what is the incentive?
March 27th, 2006 at 3:27 pm
Super Dude,
I am so glad for your post. Yes, it is true that AGL is limited in either it’s ROE, ROI, or ROA…I’m not quite sure which.
But, let’s take your use of ROI as the correct one. Return on Investment.
If AGL is allowed to specifically recover 100% of their investment in this pipeline, then, what does “Investment” equal for them? ZERO, right?
So, in effect, they get the use of a free asset to help them generate return to add to their overall ROI.
Compare that to Southern Natural Gas’s investment into THEIR pipeline. I have been told that they are investing their own funds to build their Elba Express and they are RISKING 100% of their own money, with no guaranteed “recovery” from any buyer of the gas they will transport.
That is the way normal business operates, Super Dude. You invest capital into building something, there is NO guarantee from the government that you will be able to recover the cost of that asset. You only have your own wits and hopes that the stream of returns that you will generate from the revenue you receive from that investment will more than offset the cost of capital for that asset.
The “incentive” you ask about is the dual-edged sword of, not the monopoly implication of the company, but of the PUBLICLY-OWNED facet of the corporation.
If you are the finance guy in charge of a publicly-owned corporation, it is your DUTY to maximize shareholder wealth.
You sit around on your rear-end and hold onto cash because there is no guarantee that any project you invest in will give you a positive return, and I guaran-damn-tee you your company will be bought-out and taken over by someone who will put that money to good use to continue to build the company’s income streams.
The only economic systems that I know of that will give everyone a “guaranteed” return on everything they invest in are economic systems of the Fascist, Socialist, or Communist governments.
March 28th, 2006 at 7:17 am
This bill is driven by the needs of lobbyist clients at the expense of our kids future. As a Republican we are for less Government and fiscal responsibility, and personal responsibility. Our party has to many on a State and Federal level , who keep passing pork lobbyist driven bills ,like Pipeline, Highway,Energy,No Child Left Behind,Drug…… while sticking us with the bill. It is time for more of us to stand up and challenge in the primaries and take our party back.Thanks jk
March 28th, 2006 at 8:57 am
There is a fallacy in your banana analogy. If the demand exceeds the capacity of the road and adequate supply exists at the other end of the road, putting in a new road will increase supply to the market.
March 28th, 2006 at 9:04 am
Tom,
You’re right…IF demand exceeds supply.
But, as I said, right now, AGL’s lines are only at about 70% capacity and we are still at high gas prices.
I have no problem with AGL building a line. I have a problem with us having to repay them for the line EVEN if no gas flows through that line upon completion.
Do you understand that? Even if they build it and no gas flows through that line, WE have to pay for its construction.
If AGL builds the line, and then decides to sell it to some other energy entity, they can do that…BUT, WE will still be bound by this bill to repay AGL the original cost of the pipeline.
No thank you. I do not wish to give AGL a free ride.
March 28th, 2006 at 9:26 am
It seems to me that it is about time giant corporations begin paying their own way. Why should tax money be spent on a pipeline that is going to benefit only one giant company AGL? Our Georgia Legislature has aapproved so many exemptions for so many special interest groups already that the burden has fallen more and more onto the backs of the working class. If a company is going to make a profit, they should make the entire investment without taxpayers’ money.
March 28th, 2006 at 9:50 am
Calvin Lee,
One minor correction: it is not a “tax” per se. It is a “rider” on every residential user of natural gas.
What’s very interesting is that non-residential users don’t have to pay these riders.
March 28th, 2006 at 6:10 pm
Did the bill pass or not. The ajc said Southern had a whistle blower. I bet AGL paid the person off. I have sat back and read these post and the only offer I have is read http://www.bloomberg.com each day you will see the price upswings. It shows the price daily for gas and crude it will raise your blood pressure. One small word of advice, I have seen where they are trading for next winter. The price for a therm is $4.00 higher then it is now. Lock in the lower price and save some money.
March 28th, 2006 at 7:57 pm
The bill is frozen in the Senate, not going anywhere this session.
March 29th, 2006 at 6:12 am
That’s very good to hear, but do you think the Senate might be using it as a bargaining chip with Burkhalter in the House? You already outlined why he wants this thing so badly. How quickly could it be resurrected?
March 29th, 2006 at 7:10 am
HB 1325 failed to obtain placment on the Senate Rules Calendar for the 39th Day of the 2006 Session. This is the final Rules Calendar of the session. The Senate has no formal calendar for the final day, dealing mostly with “special orders:” conference committee reports and motions to agree or disagree to House amendments to Senate bills and amendments. Some bills that were tabled duirng the 39th Day can be “taken from the table” on a motion, and considered on the 40th Day, but neither HB 1325, nor a bill to which its content is germane, and available as a vehicle for amendment, has been tabled as of the end of Day 39.
As nearly as experienced lobbyists can tell, there is no suitable “vehicle” for HB 1325 left on the General Calendar of Senate bills pending in the House.
HB 1325 would thus appear to be defeated. The behavior of Gas Co. lobbyists on the 38th Day, when they could not secure enough Senate votes for passage made it plain enough that they were not going to get their bill.
Public outcry such as was facilitated by this website and other media was apparently responsible for the defeat.
March 29th, 2006 at 8:37 am
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March 29th, 2006 at 10:18 am
Bill, of course HB 1325 is a bad bill. All bills pertaining to taking money from the people for the benefit of Corporations are bad bills. These bad bills seem to be the only ones ever to make it in the hopper except for the deliberate divisive partisan bills.
The debate over them seems to only occur between the lobbyists representing their client’s interests. They only involve the public to lever politicians into acting in their client’s behalf.
We still need to see that legislation correcting the deregulation of natural gas is drawn up and implemented. This legislation would need to include setting 12 billing cycles that equate to 365.25 days per calendar year, a uniform rate for the cost per therm to all customers in Georgia based on a real market price established by competing producers.
Competition is not actually occurring due to conglomerates controlling the entire energy sector. A megalithic structure exists concealed by merged corporations that control mining, transportation, refining, distribution, and generation of electricity. Southern company is the holding company for numerous states PSC regulated power companies. Alabama, Georgia, Florida and South Carolina are just some of the subsidiaries they own as electricity generators.
The Enron and Mirant bankruptcies revealed how devious this manipulation was and is. Prior to hurricane Katrina the head of the Atlanta Federal Reserve Bank Jack Guynn told the Association of Financial Analysts that energy prices were going to increase through the year. The analysts then told their clients to buy energy stocks, bonds and futures. It becomes a self fulfilling prophecy and contains an insider element.
If enough people lock into higher rates in contracts for natural gas because they believe the price is going higher the result is the price is higher. All bubbles are created by this type of herd mentality frenzy. The bubbles eventually burst either by manipulation of the supply of money or other created disasters such as war, and even natural mega disasters. Men usually hold the pin that burst the bubble and pin holder can be found by the detective who remembers to watch who profits in the end.
March 29th, 2006 at 10:39 am
I did not believe that we need to elect lobbyists how do you feel about that issue? It’s one thing to have a cross section of various independent business owners represent Georgia. It is quite another to have hired guns (lawyers)writing legislation that enable consolidation of fictitious entities created by lawyers writing laws that benefit the fictitious entity the corporation
Look around as the mega US corporations build their largest plants in China and we become a people warehouse a tourist destination as our money is being devalued compared to other currencies.
March 29th, 2006 at 10:43 am
Scudson told me that too and also told me he wrote a book on it.
March 31st, 2006 at 6:26 pm
Craig, I was wondering if your last post was meant for me. How can people locking in low rates now make it raise prices. The prices are set by the market which are updated the first Monday of the month. The market trades gas shares months in advance waiting for the next blizzard 7 months from now. I wonder if you are thinking of the pump price going up like with Rita and etc. That shortage was caused by bad press and fake emails but there was a shortage. The reason for that price increase was the spot price which if you look at http://www.bloomberg.com changes every minute. Sorry to kick a dead horse.
Kevin
March 31st, 2006 at 8:47 pm
Kevin, Are you a lobbyist representing a competitor of AGL? If so it was meant for you if not I was stating what i have learned about the beating we are taking. You stated the current price in terms of a therm was 73 cents.
In november the rates offered were in the $1.69 range to lock in. That is a mark up of over 100%. Prior to deregulation AGL was selling us gas for 29 cents per therm in the off peek months and slightly higher in the winter months and that included the delivery (pipe charges) and services related to checking out your gas appliances.
The news agencies said after Katrina that Natural gas prices was going to go higher due to a cold winter and the hurricane damage. The lettuce in my garden never even froze this winter. That forcast was false per you quote of 73 cents. Now you would have us believe that it will be higher next winter and we should lock in at even a higher rate. It sounds like you are betting in the futures maket and trying to make it happen.
The California blackouts were purposely done for the same reason to scare the people just like the reports after the hurricane that drained the gas stations tanks. If we all ran out and filled all our vehicles tanks to morrow the stations would go dry again till the tankers could resupply them.
There is no free market at this time. It is time to bust the energy trusts. Fire those who cater to the cartels.
April 1st, 2006 at 7:41 am
Craig, no I am not a lobbyist but just someone who watches the market. I watch and read the news and it pisses me off. My point was people who locked in at $1.69 are screwed unless they unlock now. The market price for a therm is $1.05-$1.40 not the 73 cents. The last two months of the year traders were pricing it at almost $3.00 a therm then for some reason they woke up and found out it was not cold. The prices dropped almost from $15.00 a therm to $9.00 then to the level of $7.30 a therm. The $15.00 a therm would have been almost $3.00 a therm for the last two months. The people who locked in at $1.69 were ok the others were not. Then the bottom fell out when Spitzer was going to put the pressure on the companies trading the contracts. Then it dropped to $7.00 and has floated back and forth. The article I read online was reporting even though there is a surplus of natural gas that the traders are bidding next winter at $10.00 a therm which would be $1.70 a therm well above the market rate now. The other comment I was making several companies were offering discounts of 99 cents to $1.05 a therm for fixed prices.
Now for the comment bout me trading in the market that is a no. I slap my gas station around every time I see them raise the price 10 cents or 20 cents in a day. The market is being run by out of control traders looking to make a buck. Pension funds, 401ks any big money fund can throw money in the oil contracts. The day of “pro’s” running the market when it was $20.00 a barrel is done now its a knee jerk crew. I would like to find a way to stop trading during these knee jerk times. I am sick of reading articles online where due to Nigeria, Iraq, Iran or someone had a cold at a plant and shut it down the price spikes. To put it on a level of big oil the trading companies like Goldman Sachs made $6 billion dollars in trading and other services for one quarter. They send out notes to clients every day saying the sky is falling buy, buy, buy. There is even a surplus of crude and fuel but you would not know it by the crude price. So to answer your question naw I am not a lobbyist but a pissed off person who is sick of people trying to make a quick buck off the little guy. Then write an article saying how the public is getting used to the prices so never expect it to drop. I understand your points on the Enron and other power companies in the past. I need to run and drink my gallon of Kool-aid my friends say I drink. If anyone can throw ideas at how to do a stop order on trading contracts so companies like Refco and Goldman stop screwing us let me know. By the way Refco was the largest commodities broker in the world they were closed down due to fraud. There clients were unable to trade for 15 days which was during the storms and oil prices fell almost $10.00 that week. Then the clients moved to other companies or were able to trade when companies bought out parts of Refco and the prices jumped.
Kevin
April 1st, 2006 at 9:18 am
Kevin, as one abused citizen voter to another, keep posting the information you have. Get the message out the media won’t do it they have been bought off for over a hundred years. You can reach more people on http://www.ahrc.com which has a feed through http://www.georgia.ahrc.com. Craig