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Retail Supplier Seeks Hearing On Nonbypassable Charges Related To Generation, After Withdrawing From Settlement

Supplier Now Contesting Stipulation That Had Deferred Issue Of Further Unbundling To Rate Case (Recent Decisions Resulted In No Further Unbundling)

October 22, 2018

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

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IGS Energy has requested that the Public Utilities Commission of Ohio hold a hearing on a stipulation governing default service at Dayton Power & Light, after IGS Energy withdrew from the stipulation as the result of PUCO modifying a key provision of the stipulation

Specifically, the stipulation provided that the Reconciliation Rider (RR), which recovers costs/benefits related to the sale of DP&L's entitlements in Valley Electric Corporation (OVEC), was to be bypassable to customers served by a competitive retail electric service (CRES) provider.

However, as reported by EnergyChoiceMatters.com, PUCO in 2017 rejected this provision of the stipulation, and made the Reconciliation Rider nonbypassable. PUCO in its order cited concerns with increased shopping at DP&L, and the potential for such shopping to increase the balance under the OVEC reconciliation rider, which would increase the impact on non-shopping SSO customers

PUCO recently affirmed this finding in rejecting a request for rehearing from IGS Energy in September 2018, prompting IGS's withdrawal from the stipulation

IGS Energy said in a notice withdrawing from the stipulation that, "The modification was material and undermined the benefit of the bargain."

IGS Energy said, "Following a material modification to the Stipulation not corrected by the Commission, pursuant to Provision XI(5) of the Stipulation, any Signatory Party may withdraw from the Stipulation by filing a Notice of Withdrawal."

IGS Energy said, "According to the Amended Stipulation, if a party withdraws as a signatory party, 'the Commission will convene an evidentiary hearing to afford that Signatory Party the opportunity to contest the Stipulation by presenting evidence through witnesses, to cross-examine witnesses, to present rebuttal testimony, and to brief all issues that the Commission shall decide based upon the record and briefs.'"

"Through [the] Notice of Withdrawal, IGS asserted its right to contest the Stipulation in its entirety. Therefore, it is necessary to establish a procedural schedule. The Commission should schedule an evidentiary hearing to permit IGS to cross-examine witnesses supporting the Stipulation, to permit IGS to present its own witnesses, and to brief all issues so that the Commission may issue an order based upon the record and briefs," IGS Energy said

While the modification of the Reconciliation Rider was the material change prompting IGS's withdrawal, as noted above, IGS asserts its right to contest the Stipulation in its entirety. Other relevant parts of the stipulation included the withdrawal of an earlier agreement among certain parties under which DP&L had agreed to establish a component of the SSO rate to recognize costs related to but avoided by default service. The subsequent amended stipulation dropped this provision and instead, in IGS's words, "acknowledged the existence of SSO-related costs embedded in distribution rates, but the parties agreed to evaluate that matter in DP&L’s distribution rate case rather than resolve it [in the ESP proceeding]."

Notably, as exclusively reported by EnergyChoiceMatters.com, PUCO recently denied a request from the Retail Energy Supply Association and IGS Energy to implement a revenue-neutral rider that would have made certain costs related to default service (Standard Service Offer, or SSO) bypassable, with revenues collected under the rider refunded to all distribution customers, which had been intended to address the issue of SSO-related costs embedded in distribution rates that had been removed from the amended stipulation in the ESP proceeding.

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