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Utility Seeking To Recover Eight-Year Old Costs From Retail Suppliers Due To Utility Error

June 15, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

After the District of Columbia PSC recently ruled that Washington Gas Light erred by resolving retail supplier over-deliveries during a period of the winter of 2008-2009 through cash payments instead of volumetric adjustments, WGL is now seeking to recover from retail suppliers reimbursement for such cash-outs.

NOVEC Energy Solutions, Inc. petitioned the PSC to clarify that PSC did not authorize such reimbursements when addressing WGL's actions, and asked that the PSC prohibit WGL from seeking payment from NOVEC Energy Solutions

Previously, in 2013, PSC Staff learned that an error in the forecasting model WGL used to determine the Daily Required Volumes (DRVs) for the competitive service providers (CSPs) resulted in over-delivery of natural gas supplies to its city gate over the period January to March 2009. CSPs participating in WGL’s Choice Program receive a DRV from WGL and are required to deliver those volumes to the city gate daily, or incur penalties. In the winter 2008-2009, WGL had a "computer error" and issued DRVs that were too high. Thus, CSPs delivered exactly what WGL instructed them to deliver but, because of WGL’s internal error, the delivered volumes were too high through no fault of the CSPs.

In an August 2016 order (Order No. 18505 ), the PSC concluded that WGL acted outside of its tariff in issuing the cash-outs, and ordered refunds amounting to $2.4 million to default service customers as a result of additional costs incurred due to the payment of cash-outs to CSPs instead of volumetric adjustments

Citing the order, WGL is seeking reimbursement from NOVEC for the cash-outs

"However, Order No. 18505 does not address, much less authorize, WGL to demand payment from retail suppliers. Nor does any other order issued in this proceeding," NOVEC said.

NOVEC said that Order No. 18505 addressed only WGL's obligation to make default service customers whole

"There is nothing in Order No. 18505 that authorizes WGL to demand payments from CSPs. Instead, Order No. 18505 directs WGL to file a plan describing how and over what amount of time it will implement the refunds to eligible customers," NOVEC said

"It is NES’s view that WGL lacks tariff or other authority to seek such payments from NES approximately eight years after the payments were made, and it would be unfair and unreasonable to expect or require NES to pay the requested dollar amounts," NOVEC said

While an implementation plan to provide customer refunds filed by WGL included a sentence stating that, "WGL intends to seek reimbursement of this refund amount from the affected competitive service providers," NOVEC said that the PSC did not specifically approve this mechanism in addressing the plan.

NES requests that the Commission either: (1) clarify its prior orders in this proceeding to prohibit WGL from seeking repayments from CSPs eight years after WGL paid suppliers in reliance on its own tariff; or (2) issue an injunction prohibiting WGL from seeking repayments.

FC 1126

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