Ohio Gas Legislation

A bill introduced in Ohio would have required Enron to become certified and
pay the OCC and PUCO assessments. Other provisions called for allowing the
LDC to tack on a surcharge to recover from all customers the additional costs
incurred as a result of a defaulting supplier. Further provisions allow for
a municipal aggregation pilot with the authority granted to the PUCO to allow
the program to be expanded to all municipalities at the end of three years.
At that point, the utilities could seek stranded costs, however it is
questionable how much they would actually have.

Fortunately, we were able to get an amendment that limited the applicability
of all these regulations and costs (assessments, surcharges and stranded
costs) to just the "choice" customers. Choice customers are primarily
residential customers operating under the PUCO approved programs established
in the Columbia, East Ohio and Cinergy service territories. The threshold
for regulation, etc is to exempt a mercantile customer who is defined as " a
customer that consumes, other than for residential use, more than five
hundred thousand cubic feet of natural gas per year at a single location
within this state or is part of an undertaking having more than three
locations within or outside this state." This should cover most, if not all
our customers.

The status of the bill is that it has passed committee and the Speaker is
going to pass it out of the House without amendment. We are hearing that the
Senate will accept no amendments either, however, that remains to be seen.
Barbara and I are monitoring this closely and will keep you posted.

Janine