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Citing Due Process Concerns With Prior Directive, PSC Opens New Docket For Changes in Choice Program

July 24, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

The Michigan PSC has opened a new docket to consider cost-shifting to default service (GCR) customers under Consumers Energy's choice program, after acknowledging alternative gas suppliers may not have had proper notice that issues affecting the gas choice and transportation program were to be addressed in a GCR proceeding

Specifically, in a June 3 order addressing a Consumers Gas Cost Recovery (GCR) plan, the PSC had directed that Consumers should consider, under its current gas customer choice (GCC) tariff, appropriate daily delivery obligation (DDO) determinations in order to ensure that GCR customers do not incur costs of additional supply purchases going forward. The Commission also instructed Consumers to address, in its next gas rate case, any GCC tariff changes needed to remedy this issue.

Regarding Consumers’ administration of its end use transportation (EUT) program, the Commission on June 3 instructed the company to evaluate its options under the existing EUT tariff to remedy the inequity that results from GCR customers shouldering a disproportionate share of the incremental purchased gas costs caused by colder than normal (CTN) weather

Consumers sought rehearing of these orders, arguing that the June 3 order’s instructions are a deviation from the Commission’s standard procedure for considering GCC program tariff issues. Specifically, Consumers argued that, in past cases, such issues were resolved in cases specifically designed to address the GCC program and its implementation, or in general gas rate cases where various tariff issues are regularly raised, considered, and decided. In those circumstances, parties interested in participating in the litigation or consideration of the GCC program tariff received appropriate notice of the opportunity to participate. In the instant case, Consumers pointed out that no party petitioned to intervene in this proceeding to represent the interests of GCC or EUT customers or suppliers.

On rehearing the PSC concluded that, "Having considered the arguments for and against granting rehearing in this proceeding, the Commission concludes that rehearing should be granted for the limited purpose of creating a separate docket and proceeding in order to enable Consumers and all interested parties to participate with adequate opportunity to evaluate any necessary changes to the company’s EUT and GCC programs and relevant tariffs in order to protect GCR customers from inequitable gas supply costs during CTN weather. The Commission finds that Consumers met its burden of establishing that granting rehearing is necessary to avoid the unintended consequence of a denial of due process to those AGSs who may wish to participate in a proceeding addressing these issues."

"In the instant matter, interested parties who might have sought intervention and the opportunity to present evidence in this case had they known that Consumers’ GCC and EUT programs were going to be scrutinized with an eye toward remedying the inequity that has resulted from GCR customers paying a disproportionate share of gas costs during CTN weather were not informed that this was a matter to be considered in this case. Thus, to the extent that those left out of the proceeding could become responsible for shouldering a greater portion of gas costs during CTN weather as a result of the Commission’s June 3 order, they should not be deprived of proper notice and an opportunity to be heard on the issue Accordingly, the Commission grants rehearing for the purpose of scheduling a separate proceeding on its own motion in Case No. U-17900 to address the inequity of GCR gas costs during CTN weather and Consumers’ EUT and GCC programs and related tariffs," the PSC said.

Under the new proceeding examining cost-shifting under the choice and transportation programs (U-17900), the PSC directed parties to file proposals addressing the GCR gas cost issues identified in the Commission’s prior June 3 order to ensure that GCR customers do not incur costs of additional supply purchases going forward, such as in colder-than-normal weather

As previously reported, Consumers has already proposed in a recently field rate case changes in retail supplier obligations and balancing to address certain cost-shifting concerns (click here for story)

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