Despite assurances by public utilities, the question remains: Can the public really expect to get a much better deal on the gas it buys? Ultimately, gas deregulation is the wave of the future, but for now, it is only cost-effective for large users, says co-op consultant Herb Rose, president of Herb Rose, Inc., located in Mount Vernon, New York. Rose points out that about 40 percent of the actual cost is for the gas itself. Then there are two levels of transportation: interstate, which is regulated by the Federal government; and local pipelines, which are serviced by the local utility companies and are taxable. Local transportation accounts for another 40 percent of the cost. The final 20 percent goes to the local utility for ancillary services. This means that approximately 60 percent of the overall costs are subject to local tariffs.

The only part that is completely deregulated is the commodity itself, the natural gas. At this point, even if independent marketers offer better prices for the gas, the local utilities' tariffs and charges nullify the savings to the consumer. Another contributing factor to the uneven rate base is the five percent credit the utilities offer to their dedicated customers. However, the Public Service Commission (PSC) has determined that as of the second quarter of 1997, all consumers will be offered these credits, whether the commodity provider is the utility or an independent marketer.

According to Lindsay Audin, president of EnergyWiz, Inc, an Ossining, New York-based consultant to a number of large energy users including Columbia University, the savings will depend upon location, as well as the volume of gas being used. No matter which company the gas is purchased from, whether it is an independent marketer or a local utility, the consumer is charged by Con Ed or BUG for transporting the gas through local pipelines. The moment the gas is brought to the city gate, even if a building has purchased the commodity at an optimal rate, additional tariffs on the transportation and ancillary services, such as meter readings, are added.

Two years ago, Audin explains, when gas was deregulated in New York State for the firm customer, it was done very poorly. The PSC and marketers did a bad job and the utilities got away with murder. Now, the PSC must try to ameliorate a bad decision. Audin is referring to the fact that because of the initial guidelines set by the PSC with the utilities, there is no clear breakdown on the actual costs. The utilities bundle the costs or combine them in the billing. It is not a level playing field, adds Catherine Luthin, executive director of the New York Energy Buyers Forum and a principal of J.C. Associates, an Ocean, New Jersey-based energy consulting firm. The residential market is not yet working and only public sentiment will produce a thorough examination in order to ensure all costs are justifiable.

According to Michael Printz, director of marketing and sales for the Rent Stabilization Association of New York City, Inc. (RSA), a Manhattan-based trade association representing 25,000 property owners and agents, The market needs to de-monopolize, not deregulate. RSA has made great efforts to sort out the deregulation morass and it recently joined forces with the Community Housing Improvement Program (CHIP), the Small Property Owners of New York (SPONY) and the Council of New York Cooperatives (CNYC) to form the Apartment Coalition whose goal is to represent the industry b ffb efore the PSC. The Apartment Coalition has been submitting recommendations on ways to improve rate competition on behalf of the multi-family housing industry.