Energy Choice
                            

Matters

ESCOs Protest Another Refund in Excess of $1/Mcf On Supply Rate at N.Y. Utility

December 9, 2014

Email This Story
Copyright 2010-14 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

Similar to a recent protest concerning Consolidated Edison, the Small Customer Marketer Coalition has protested a reconciliation filing by Orange & Rockland under which O&R seeks to apply a GSC refund of $1.370/Mcf to default service customers over the twelve month period commencing January 1, 2015.

"In the event actual gas costs are approximately $4.50/Mcf in 2015, application of the refund would act to reduce the GSC market price by approximately 30%. Further it would diverge significantly from previous years when the credit between2012-2014 ranged from $0.2591-$0.8278," SCMC noted.

"Allowing implementation of this massive out-of-period adjustment would further exacerbate the lack of transparency and relevance of utility commodity pricing. The goal of pricing transparency and presenting the customer with a clear picture of the impact of taking ESCO service as compared to utility service becomes muddled and incoherent if the utility charges do not reflect current costs and are cloaked in veils of mystery," SCMC said.

"The [reconciliation] Filing also underscores that O&R did not administer the GSC mechanism in a reasonable manner. In view of the enormous magnitude of the proposed credit adjustment and potential dramatic impact it would have on the competitive market, prudent utility practice would dictate that the utility monitor the amount of over collection regularly and seek to minimize or spread out its impact. It is illogical to a credit of this magnitude," SCMC said.

"Further, this lack of proper management has escalated drastically in recent years. In 2012 the GSC Refund was $0.2591; in 2013 the GSC refund was $0.6736; and in 2014 the GSC Refund was $0.8278. Thus from 2012 to 2014 the GSC Refund increased by 219%, and if the instant request is granted the GSC Refund would increase from 2012 to 2015 by 430%. The scale and magnitude of these increases demonstrates that the Company’s cost management and recovery process is flawed," SCMC said.

"There is also a reasonable basis to question the Company’s allocation of various cost reductions and allocations solely to the full service customer. A major factor underlying the over collection is the approximately $8.1 million associated with 'Off System Transactions'. These reflect revenues received by the Company from the use of various capacity assets, for the cost of which ESCOs may have contributed and which under the capacity release structure ESCOS should but do not have access to an equitable share.8 Nonetheless these revenues are only allocated inequitably to the benefit of full service customers. Similar concerns and questions arise with the reduction of approximately $10.9 million associate with Commodity Winter Bundled Storage and the Balancing Charge of $16.1 million," SCMC said.

SCMC said that the Commission should limit O&R to applying a reconciliation credit in 2015 that is equivalent to the average credit applied by O&R in 2012, 2013 and 2014.

"This would enable the utility to commence an appreciable level of cost recovery. Simultaneously, the Commission would direct O&R to convene a Collaborative open to all interested parties to consider alternative rate mechanisms that would allow recovery of the remaining charges in a manner that does not impair the provision of accurate pricing signals to the consumer," SCMC said.

ADVERTISEMENT
NEW Jobs on RetailEnergyJobs.com:
• NEW! -- Business Development Director
• NEW! -- Scheduling/Business Analyst -- Retail Provider
• NEW! -- Staff Accountant -- Retail Provider -- Houston
• NEW! -- Regional Sales Manager -- Retail Provider -- PA/IL/New England/Texas
• NEW! -- Sr. Pricing Analyst -- Retail Provider -- Houston
• NEW! -- Senior Energy Markets Pricing Analyst
• NEW! -- Energy Markets Analyst
• NEW! -- Utility Rules Analyst -- Retail Supplier
• NEW! -- Compliance Analyst -- Retail Supplier
• NEW! -- Manager Government and Regulatory Affairs - Texas -- Competitive Supplier
• NEW! -- Account Manager -- Retail Supplier -- New York
• NEW! -- Natural Gas Sales/Operations
• Business Development Director