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Retail Supplier Floats 'Switch Hold' Proposal in New Market
To the extent the Georgia PSC does not make Atlanta Gas Light responsible for the collection of curtailment penalties, the Georgia PSC should authorize natural gas poolers on the Atlanta Gas Light system to place a "switch hold" on certain accounts, Infinite Energy said in comments to the PSC.
Infinite Energy was commenting on several AGL tariff revisions before the PSC which are designed to ensure interruptible customers curtail when required.
Click here for related story on the tariff provisions and new workshop process.
Specifically, Infinite Energy suggested that poolers be allowed to place a switch hold on interruptible customers incurring curtailment penalties as a result of violating a curtailment condition, and who fail to pay such penalty to their pooler.
"A switch-hold is defined as a flag placed on an indebted customer's account which prevents that customer from resuming or switching service until the debt is paid in full. The purpose of a switch-hold would be to give Poolers the authority to deny an interruptible customer from burning gas or switching to a different Pooler in order to avoid paying curtailment penalties with their current Pooler. Switch-holds would only be placed in instances where an interruptible customer incurred curtailment penalties as a result of violating a curtailment condition. Although a switch-hold may not guarantee that a Pooler is able to recover penalties assessed to an interruptible customer, it will at least provide a degree of security to the Pooler as well as an incentive for the interruptible customer to pay. Since the issuance of curtailment penalty is a means in which to correct customer behavior, allowing a customer to skip out on the penalty by switching Poolers once a bill is issued, ruins the behavior modification AGLC is wishing to adopt. A switch-hold can be removed at any time by a Pooler, and must be removed once the Pooler is made whole of all monies owed by the interruptible customer. Once the switch-hold is removed, the interruptible customer would be able to switch to a different Pooler if they choose," Infinite Energy said.
A switch hold is not Infinite Energy's preferred solution to the curtailment penalty issue, however. Rather, AGL should be responsible for billing and collecting any curtailment penalties incurred by interruptible customers, Infinite Energy said, since the interruptible contract is between AGL and the interruptible customer, and poolers are neither parties to nor the primary beneficiaries of the arrangement between AGL and interruptible customers.
"AGLC's proposed curtailment penalties are potentially enormous and shift considerable financial risk to Poolers. AGLC is asking Poolers to absorb the financial risk of collecting curtailment penalties for unauthorized gas use without providing Poolers the essential means to manage that risk at the meter. Poolers should not be held responsible for the billing and collecting of AGLC's curtailment penalties as only AGLC has the ‘power of the wrench' to physically force an interruptible customer to obey an AGLC curtailment order. Further, AGLC does not provide any type of hourly customer burn data to Poolers, and only provides full day burn data several hours after the gas day ends. AGLC should indemnify Poolers for the financial responsibility of unauthorized gas use because only AGLC holds the leverage to limit the associated financial risk when interruptible customers violate an AGLC curtailment order. The Poolers hold no such leverage," Infinite Energy said.
"Moreover, the interruptible contract is between AGLC and the interruptible customer; Poolers are neither parties to nor the primary beneficiaries of the arrangement between AGLC and interruptible customers. While it is evident that interruptible service and the associated curtailment is critical for maintaining the system, in this regards Poolers are a third party in all meaningful respects. Should an interruptible customer of significant size fail or refuse to curtail, the Pooler is unable to take any action except after the fact; namely, litigation and other costly collection efforts to recoup receivables which the Pooler was forced to purchase without consideration," Infinite Energy said.
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March 13, 2014
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Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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