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Columbia Gas, Ohio Staff, Marketers File Stipulation to Remove Columbia from Merchant Function
October 8, 2012
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Copyright 2010-
Columbia Gas of Ohio, Staff of the Public Utilities Commission of Ohio, and several retail natural gas suppliers have filed a stipulation to govern the exit of Columbia Gas from the merchant function, for both non-residential and residential customers.
The stipulation, made as a petition to modify the existing Standard Choice Offer program, was filed in Case 12-2637-GA-EXM.
The parties agree that meeting a threshold participation level for migration away from the Standard Choice Offer (SCO) will trigger, in the case of residential customers, an application before PUCO for Columbia to exit the merchant function, or in the case of non-residential customers, Columbia's actual exit from the merchant function (with no further application at PUCO required).
Specifically, Columbia shall review each month whether residential migration away from the SCO has met or exceeded 70% during the past three months. If migration away from the SCO has met or exceeded 70% of the CHOICE-Eligible residential customers for three consecutive months, then Columbia shall file an application with the Commission to exit the merchant function for all CHOICE-Eligible residential customers on the first April that is: (1) at least one month after that evaluation period, and (2) at least twelve months after Columbia exits the merchant function with regard to non-residential customers.
The Commission shall hold a hearing and Columbia will bear the burden of proof to show the Commission that it should approve Columbia's application.
If the Commission approves the residential exit application, Columbia will exit the merchant function with regard to residential customers effective the first April 1 that is at least five months after the issuance of the opinion and order approving the application.
If the consecutive three month 70% customer participation threshold for CHOICE-Eligible residential customers has not been met, or the Commission has not issued an opinion and order approving an application by Columbia to exit the merchant function with regard to CHOICE-Eligible residential customers, by November 1 of any year, then Columbia will continue its SCO auction for gas to be supplied to residential customers during the subsequent program year (the following April 1 through March 31).
As noted above, a non-residential exit from the merchant function for Columbia must precede any residential exit.
On June 1 of each year, Columbia will determine whether during the prior 12 months non-residential customer migration away from the SCO met or exceeded 70% of the CHOICE-Eligible non-residential Customers for three consecutive months.
If the consecutive three month 70% customer migration threshold has been met, then Columbia will exit the merchant function with regard to non-residential customers effective the first April 1 that follows. No additional application before PUCO would be required.
If the consecutive three month 70% customer migration threshold for CHOICE-Eligible non-residential customers has not been met by June 1 of any year, then Columbia will continue its SCO auction for gas to be supplied to non-residential customers during the subsequent program year (the following April 1 through March 31
Upon exit from the merchant function, Columbia will provide no default commodity service to CHOICE-Eligible customers. Those CHOICE-Eligible customers that do not enroll with a supplier will be assigned to a supplier, pursuant to Columbia's Monthly Variable Rate (MVR) Program.
The stipulation does not provide for a process to allocate non-shopping customers to MVR suppliers under the MVR program, but processes may be proposed by parties in testimony during the review of the instant stipulation. Parties noted the allocation process shall address the initial allocation of non-shopping customers upon a merchant function exit, plus the allocation of any non-shopping customers which arise after such initial allocation (such as new service customers).
Customers assigned to an MVR supplier shall be free to leave the MVR supplier without a termination fee.
Suppliers that are active in Columbia's CHOICE program may elect each February 1 to be an MVR Supplier for the upcoming program year (April through the following March).
The MVR price shall be no greater than the supplier's MVR price posted on the Commission's Apples to Apples chart for the same billing period. MVR suppliers agree to have their MVR prices posted on the Commission's Apples to Apples chart each month.
Non-residential customers establishing service with Columbia for the first time (including both the initial installation of a new meter at a premise as well as an account transfer or switch from one customer to another) and customers relocating within Columbia's service territory will be served under the Default Sales Service (DSS) for two billing cycles. Subsequently, CHOICE-Eligible Non-Residential Customers who have not selected a CHOICE supplier and are not served through a Governmental Aggregation Program will be assigned to an MVR Supplier.
CHOICE-Eligible Customers are those customers who:
• Use less than 6,000 Mcf per year, or are a Human Needs Customer regardless of annual consumption; and,
• Are not enrolled in the Percentage of Income Payment Plan; and,
• Are not a Transportation Service customer; and,
• Are not more than 60 days in arrears in payment of their Columbia bills, or not more 30 days in arrears in payment of their Columbia bills if enrolled in a payment plan.
Customers who are not CHOICE-Eligible and are not being served under Transportation Service will be aggregated and the supply for such customers will be bid out to suppliers through a Request for Proposal process.
Upon exit from the merchant function, Columbia will continue as the supplier of last resort. Columbia will also retain responsibility for all system balancing obligations, and will maintain operational control of the interstate pipeline capacity necessary to satisfy that obligation
Aside from the provisions relating to a merchant function exit, parties also sought several additional changes to Columbia's existing SCO program.
Notably, under the settlement, the Balancing Fee will be will be charged directly to customers instead of being charged to suppliers. The Balancing Fee will also be reduced from $.32/Mcf to $.27/Mcf.
Columbia has also agreed to implement a variety of billing enhancements for retail suppliers.
Columbia will use its best effort to implement the following changes by April 1, 2013:
• Permit Suppliers the option to bill a fixed bill for the Suppliers' charges. Suppliers may submit a rate ready code to Columbia so that Columbia may bill a flat fee to their CHOICE customers covering the Suppliers' gas costs for the month;
• Increase rate ready billing codes to 100 per Supplier;
• Permit Suppliers to bill a rate based upon monthly NYMEX prices, plus or minus a value;
• Offer Suppliers larger logo size and placement on bill. For those Suppliers that elect this service, Columbia will enlarge and reposition the Supplier's logo to the top margin of the front page of the bill when Columbia is providing a consolidated bill to CHOICE customers. Columbia shall charge a competitively neutral fee to Suppliers that use this service;
• Permit rolling rate change submission. Suppliers shall be able to submit a rate change transaction for an existing CHOICE Customer each processing day; an accepted rate change will be effective with the CHOICE customer's next billing cycle; and,
• Permit contract portability. For those Suppliers who elect this service, Columbia will offer their CHOICE customers who transfer natural gas service within Columbia's service territory the ability to transfer their existing CHOICE contract to their new service address. This service will not be available to Government Aggregation customers.
Columbia will use its best effort to implement the following changes by April 1, 2017:
• Offer rate ready billing and/or bill ready billing by individual customer. Suppliers will have the option to bill commodity-related charges to CHOICE customers via rate ready, bill ready, or a combination of the two under Columbia's consolidated billing option;
• Permit Suppliers to offer customers the opportunity to prepay the commodity portion of the bill. A credit amount will be provided by the Supplier and applied to the customer's bill; the credit will be used to offset Supplier charges. The pre-paid amount will be reported monthly to the Supplier and offset with Supplier payments. The actual account balance and supplier monthly charges shall appear on the bill;
• Allow a new customer to start CHOICE immediately. Suppliers may elect annually to participate in this service. This optional service will allow customers to enroll in the CHOICE Program at the time they request service with Columbia. Such customers must inform Columbia when they want to establish service with their desired CHOICE Supplier. The initial rate for CHOICE customers under this service will be the same as the monthly SCO rate. If the SCO no longer exists because Columbia has exited the merchant function, the introductory rates will be established by each participating Supplier; and,
• Rolling Enrollment. Columbia will process CHOICE enrollment and drop transactions each processing day. As of the fifteenth day of each month, or the prior business day if the fifteenth falls on a non–business day, Columbia will take a snap-shot of CHOICE enrollment to develop the Demand and Supply Curves and the Capacity Allocation.
Additionally, in light of changing gas market conditions, including the abundance of shale gas, the stipulation provides for changes in Columbia's capacity portfolio.
Columbia will assign Suppliers capacity, including the Columbia provided peaking service, equal to up to 100% of the design peak day requirements of their customers.
Columbia shall determine its design peak day demand annually. Columbia will retain its existing peak day capacity portfolio through March 31, 2018 with the following modifications to Columbia's capacity contracts: (1) the Sempra peaking contract for 31,200 Dth/day shall be permitted to terminate effective March 31, 2013; (2) 22,964 Dth/day of North Coast Gas Transmission transportation capacity along with 23,255 Dth/day of Crossroads transportation capacity will be terminated when the respective contracts expire October 31, 2013; and, (3) Columbia shall renew 100% of its existing Columbia Gulf FTS-1 capacity through March 31, 2016. Thereafter, Columbia will renew its Columbia Gulf FTS-1 contracts to cover 75% of the volume under contract prior to March 31, 2016, and such renewal shall be for the two-year period April 1, 2016 through March 31, 2018.
As a result of the Commission's directions to Columbia, North Coast and Staff in Case No. 08-1344-GA-EXM, effective April 1, 2013, Columbia will retain the remaining North Coast capacity and treat such as operationally required. This capacity will be utilized as part of the Columbia-provided peaking service.
Finally, regarding the SCO auction, in addition to the Letter of Credit, SCO Suppliers will be required to provide Columbia with a cash deposit in the amount of ten cents per Mcf multiplied by the initial estimated annual delivery requirements for the SCO Program Year of the tranches won by that SCO Supplier. This security will provide a liquid account to meet supply default expenses incurred by Columbia other than compensation to the non-defaulting SCO Suppliers
The stipulation was signed by Columbia, Staff, Ohio Gas Marketers Group, Retail Energy Supply Association and Dominion Retail, Inc.
Copyright 2010-
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