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Retail Supplier: Utility's Billing Proposal Discriminates Against Competitive Suppliers, Would Favor Utility's Competitive Affiliate

September 29, 2014

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Copyright 2010-14 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

A proposal from Duke Energy Ohio in its electric security plan application has been called "discriminatory" by retail suppliers, who argue that it would favor the utility's affiliate offering unregulated services.

Specifically, Duke Energy Ohio has proposed to eliminate the ability for retail suppliers to place non-commodity charges on utility consolidated bills (via bill ready billing).

IGS Energy and the Retail Energy Supply Association both opposed this proposal, as each called the proposal "discriminatory," in separately filed testimony

"As competitive markets and technology evolve, customers will start seeing electricity as more than just the commodity, but rather a package of products and services that include the electric commodity," IGS Energy said of the need for retail suppliers' to bill for non-commodity services on the utility consolidated bill.

"Duke currently places non-electric [non-commodity] charges for itself and its unregulated affiliate on the utility bill," IGS Energy noted, who observed that, "Duke's proposal to prohibit CRES suppliers from billing for non-electric products, while at the same time billing for its affiliate's non-electric products is discriminatory and contrary to Ohio law."

"Further, Duke's proposal would allow it to provide an undue preference and competitive advantage to its affiliate in violation of R.C. 4928.17(A)(2) and (3)," IGS Energy alleged.

IGS Energy testified that it is aware of two unregulated non-electric products offered through Duke's affiliate that Duke currently places on the utility bill. Those products are StrikeStop service and Underground Protection service. StrikeStop service is an insurance service that provides coverage for damage caused to the customer's home from electric surges. Underground Protection service is an insurance service that covers damage to the customer's underground electric lines. "Duke advertises these services on its website and advertises that these services are billed on the utility bill," IGS Energy said.

"Duke's affiliate Duke Energy One, Inc. ('Duke Energy One') is the provider of StrikeStop and Underground Protection service," IGS Energy said.

Additionally, IGS Energy said that, "Duke indicated that it bills for a service that provides maintenance of customer sited lighting. Duke indicates that it provides this non-electric service to customers directly."

"It is unreasonable and discriminatory that Duke is willing to bill unregulated non-electric charges for itself and its affiliate, but at the same time, seeking to prohibit CRES providers from placing non-electric charges on the utility bill," IGS Energy said.

IGS Energy noted that Duke is able to exclude the non-commodity charges noted above from its generation uncollectible rider despite being collected on the utility bill, and thus, there should be no problem to allow retail suppliers to bill non-commodity charges on bills but exclude such non-commodity charges from POR (if PUCO so desired).

IGS Energy also raised concern that utility customers are subsidizing utility affiliates through the collection of such charges on the bill, given the lack of information about compensation for such service.

"[I]n discovery, Duke has indicated that it does not have any billing agreements with Duke Energy One to bill for StrikeStop and Underground Protection service, nor is it clear whether Duke is allocating costs for billing for these services. What is known though is that 1) Duke currently bills for non-electric products and services for its affiliate, 2) the non-electric products and services Duke bills are unregulated, 3) Duke is leveraging regulated distribution ratepayer assets to offer un-regulated non-electric products and services for its affiliate 4) there are costs Duke incurs to offer these unregulated products and services to customers," IGS Energy said.

"IGS asked Duke in discovery for the specific sections in Duke's cost allocation manual ('CAM') that relate to StrikeStop and Underground Protection. Also, in discovery, RESA asked Duke for the contracts that relate to the billing for StrikeStop and Underground Protection. Duke, however, was unwilling to provide any answers to the questions asked by IGS and RESA. Accordingly, Duke has not offered any evidence to demonstrate that it is allocating costs to its affiliates in compliance with its corporate separation plan and Ohio's corporate separation statutes," IGS Energy said.

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