Introduction and Utilization of Natural Gas the Wisconsin Experience

Abstract

Competition among the applicants to serve the Wisconsin market was very keen, and each applicant sought to outdo the other in demonstrating to the Commission its ability to furnish at the lowest rates all the gas the market would absorb. In addition, the applicants were willing to assume some of the burden of paying for the conversion of customer appliances, and two of the applicants were even willing to contribute money to reimburse distributing companies for production facilities to be abandoned after natural gas became available. The prospective city gate rates offered ranged from about 12 cents per thousand cubic feet to about 20 cents. The producers of gas in the Hugoton field in Kansas and Oklahoma were so anxious to obtain market outlets that they offered to pay some of the costs of conversion and the abandonment of facilities. The 1941 situation is in sharp contrast to that of 1949 when the pipeline to Wisconsin was completed. After protracted hearings at which the applicants were opposed by coal, railroad and labor interests, the Wisconsin Commission on January 2, 1942 issued a certificate of authority to one of the applicants subject, however, to several conditions. The most important condition was a time limitation for completion of the pipeline. The date of the order was about one month after Pearl Harbor. Subsequently, on February 7, 1942, the natural gas act was amended by Congress so as to give the Federal Power Commission jurisdiction over extension projects, such as those proposed for Wisconsin. The advent of the war and the necessity for obtaining federal approval led to the abandonment of the projects. During the ensuing years, Wisconsin became a natural gas battleground. Proponents were led by gas-distributing utilities, and certain agricultural and industrial interests who thought they would benefit from the introduction of natural gas. The opponents were led by railroad, coal and labor interests. The battle was waged principally in the legislature, although considerable pressure * Chief, Rates and Research Department, Public Service Commission of Wisconsin. The author prepared this article for, and presented it at a meeting of the Public Utilities Section of the annual convention of the American Economic Association at Chicago, December 29, 1952.