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PSC Authorizes Utility To Continue Including Default Service Rate On Choice Customers' Bills, Makes Tweaks

August 29, 2018

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Copyright 2010-17
Reporting by Paul Ring •

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The Michigan PSC adopted an order authorizing Consumers Energy to continue listing, on the utility consolidated bills for gas customer choice (GCC) customers, the utility's Gas Cost Recovery (GCR) rate.

Currently, Consumers Energy's bill display box for GCC customers includes a message stating (with pricing from a representative bill), "Your current gas commodity price is $9.56 per Mcf, which is determined by the supplier you have chosen. Consumers Energy’s price, regulated by the Michigan Public Service Commission is $3.17."

The Retail Energy Supply Association had called the GCC information on the bill anti-competitive, noting that GCR customer bills do not list gas choice pricing, nor does the bill box distinguish between product differences (value-add) between GCC and GCR service

The PSC rejected RESA's arguments that listing the GCR price, in and of itself, is anti-competitive.

"For purposes of making a comparison between the two prices, it is reasonable to assume that the GCC customer is knowledgeable about the contract that the customer entered into with the AGS, and the GCR price is readily available, factual information. The Commission does not find that the presence of the GCR price itself has a tendency to reduce or eliminate competition when it is consistently provided whether or not it compares favorably. The Commission also finds that RESA has presented no evidence showing that the GCR price is untrue, is likely to deceive a GCC customer, or is calculated to be misunderstood. The GCR price is provided to any customer who checks the Compare MI Gas website," the PSC said

The PSC said that inclusion of GCC rates on GCR customer bills would be impractical given the number of GCC offers in the market. GCR customer bills do contain a link to the PSC's gas choice shopping/offer website, though RESA had argued that the font size for the link on GCR customer bills is inappropriately small. The PSC did not order any changes related to GCR customer bills.

While the PSC authorized the GCR rate to continue to be listed on choice bills, the PSC did require changes concerning its description.

"[T]he Commission finds merit in RESA’s argument that the two prices are apples-to-oranges. While not rising to the level of being anti-competitive, false, deceptive, or misleading, the bill message as currently written is presumably incorrect because it refers to the GCC price as a commodity price, but does not refer to the GCR price as a commodity price. Vice versa would be more accurate. Consumers’ GCR price, pursuant to MCL 460.6h, actually relates solely to the cost of providing fuel. Thus, it may be called a 'gas commodity' price, and should be expressed the same way that it is expressed on the Compare MI Gas website, 'per Mcf.' On the other hand, Consumers is unlikely to know what is included in the GCC price (and has no obligation to know), but there is a good possibility that it is more than the cost of supplying fuel. Even though it is also paid volumetrically, it is, in many cases, incorrect to call it a 'gas commodity' price because the AGS has no legal obligation to set a price related solely to the cost of providing fuel. More importantly, Consumers does not know whether it is simply a gas commodity price or not," the PSC said

"The Commission finds that the first two sentences of the bill display should be altered slightly to provide a more accurate description of the GCC and GCR programs, and should read thus: 'Your current price is $X.XX per Mcf, which is determined by the supplier you have chosen and may include more than the gas commodity. Consumers Energy’s gas commodity price, regulated by the Michigan Public Service Commission, is $X.XX per Mcf.'

The bill display box also included a link to Consumer's own gas choice webpage. Under a settlement adopted by the PSC, the bill display box will instead link to the PSC's gas choice shopping webpage, which lists prices submitted by suppliers. Consumers Energy additionally agreed under the settlement to include the phone number of the GCC customer’s natural gas supplier under the 'questions' heading in the bill display box

Other Matters

Under the approved settlement, Consumers will convene a collaborative to discuss the details of a pooling option for gas transportation customers, with pooling allowing the supplier to make a single supply nomination for a group of customers. Consumers is to file for approval of such a program within 150 days

Consumers will also convene a collaborative to discuss a transportation daily balancing program. Once a consensus proposal is developed, Consumers is to propose a transportation daily balancing in its next rate case

Case No. U-18424

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