Customer Segments Summary

Order 636 caused little change in the gas business. The same producers are selling gas in the market. The same pipelines are transporting it to the same end users. Some issues have changed. Who controls the pipe­line capacity? How is it billed? Who is selling the value-added services available from storage (or comparable paper constructs sometimes called "virtual storage")? What are the rules for trading gas, pipeline, and storage capacity? Most importantly, who is ultimately responsible for gas service at the residential level? State level unbundling is challenging these factors and may constitute a far more compelling issue for the evolution of the storage industry over the next 10 years than federal regulatory change. The likely impact will be to make LDCs more peak-sensitive, require balancing across more shippers, result in continued disaggregation of utility loads, and shift gas supply responsibilities back to suppliers. In the meantime, the uncertainty of outcomes will likely preclude significant investment by LDCs in storage assets and may result in the growth of large suppliers and aggregators.