Ten years ago, when Columbia Gas launched a pilot project testing retail competition in the residential natural gas market, one of the goals was to "provide an opportunity for customers to save money on their gas bills."
A few years later, Columbia Gas dropped that goal. And no wonder.
By last March, the cumulative cost to Kentuckians who participated in the customer choice program had reached $17.3 million.
That's $17.3 million that Kentuckians could have saved by not choosing a "competitive" supplier and continuing to buy their natural gas from the regulated utility, according to a Columbia Gas filing with the state Public Service Commission.
Considering that, it's also no wonder that participation in customer choice has steadily declined from 45,780 (or about a third of Columbia's residential customers) in 2001 to 38,613 (or less than a quarter) this year.
Despite all that, there is a push in some quarters to expand retail competition as an option for consumers — and perhaps even mandate it.
A legislative resolution sponsored by Reps. Keith Hall, D-Phelps, and Teddy Edmonds, D-Jackson, ordered the PSC to study the benefits of natural gas retail competition.
The PSC is also supposed to offer advice on how best to set up such a program and have the study ready for the legislature in January.
The PSC will hold a public hearing on the subject beginning at 10 a.m. Tuesday in Frankfort and, if necessary, on Wednesday, also starting at 10 a.m.
Kentucky's experience seems fairly typical. The U.S. Energy Information Administration compared average gas prices in eight select states. In 2007, the competitive gas marketers' average price was higher in seven of eight states. Consumers paid more on average for "choice" in six of the eight states in 2008.
The concept of choice has inherent appeal. But given the experience in Kentucky and elsewhere, skepticism is in order.
Retail gas marketers have a huge burden to overcome to make a convincing case that consumers deserve more chances to overpay to run appliances and heat their homes.