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Ohio Utilities Seek To Maintain Ability To Bill Non-Commodity Services From Third Parties

Retail Suppliers Note Ambiguity In Proposed Prohibition On EDC Billing For Non-Commodity Services, Applicability To Retail Suppliers

August 19, 2019

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Copyright 2010-19
Reporting by Paul Ring •

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Ohio utilities generally opposed a proposed prohibition on the utility billing of non-commodity services as contained in newly proposed rules from Staff of the Public Utilities Commission of Ohio, with EDCs and retail suppliers also noting ambiguity in the proposal

The proposed prohibition on the billing of third party non-commodity goods or services had been exclusively first reported by last month

The proposed rules address the prohibition with different language with respect to consolidated bills, and bills which do not include any competitive electric service (utility-only bills)

With respect to utility consolidated bills, the proposed rules provide that, "No consolidated bill format shall contain charges for non-commodity goods or services from a thirty [sic] party of [sic] the EDU." [emphasis added]

With regard to utility-only bills, the proposed rules provide that, "No bill format shall contain charges for non-commodity goods or services from a third party supplier or the EDU." [emphasis added]

The proposed rules define "non-commodity good" or "non-commodity service" a good or service that, "is neither a tariffed [sic] service provided by an electric distribution utility nor a competitive retail electric service as set forth in division (A)(4) of section 4928.01 of the Revised Code."

In comments on the rules, AEP Ohio said that, "AEP Ohio currently has non-commodity charges on its bills and would like to continue to bill for non-commodity services on its bills," and that, " AEP Ohio currently bills for third party charges and would prefer to continue this practice."

AEP Ohio said that, "The Company is not aware of any concerns with continuing to bill non-commodity charges."

"If Staff edits are accepted and non-commodity charges are no longer permitted on EDU bills, AEP Ohio suggests that programs that existed before the rule change should be grandfathered and allowed to continue on bills," AEP Ohio said

In separately filed comments, Duke Energy Ohio said that the proposal, "would eliminate existing flexibility for utilities to provide customers with innovative products offered by the utility or a third-party with such products included on a single bill."

"Nothing in R.C. Chapters 4905 and 4928 offers any basis for prohibiting 'non-commodity' charges from appearing on a utility customer's bill. As long as utility bills are fully transparent regarding which charges are associated with each service, the inclusion of 'non-commodity' charges is entirely consistent with Ohio statutes," Duke Energy said

Duke further said that, "Prohibiting such combined billing for utilities would be especially unfair where there are no corresponding restrictions on supplier bills or supplier-consolidated bills."

"Competitive retail electric service (CRES) providers who issue bills to customers currently remain free to include such non-commodity services on their bills ... Imposing Staffs proposed prohibition on utilities only would violate a basic principle underlying Ohio's deregulated market: nondiscriminatory, equal treatment for both EDU's [sic] and CRES providers," Duke said

In separately filed comments, Dayton Power and Light said, "DP&L objects to limiting bill format from including non-commodity goods or services[.]"

DP&L noted that PUCO previously adopted a stipulation directing DP&L implement a non-commodity billing process that will allow retail electric suppliers to include non-commodity products and services on DP&L's consolidated bill ready bill (see details here)

As such, DP&L said that, "This suggested rule change will have the effect of undermining an active settlement agreement approved by an existing Commission Order and rendering DP&L’s recent filing moot."

In separately filed comments, FirstEnergy Solutions noted ambiguity concerning the proposal with respect to retail suppliers, due to the language, "third party of the EDU."

"The proposed amendment to this rule adds a provision that prohibits non-commodity billing by third parties of the EDU, which presumably includes CRES providers such as FES. However, because 'third party of the EDU' is not defined, it is unclear what parties would be subject to this proposed rule ... Without defining who falls into the category of 'third party of the EDU,' this proposed amendment is too broad to be implemented. Additionally, assuming that CRES providers fall into the term 'third party of the EDU,' this proposed amendment is unnecessary, as suppliers do not currently have the authority to put non-commodity charges on a utility bill," FES said

The Retail Energy Supply Association and Direct Energy said in joint comments that the proposed rule regarding non-commodity billing should be clarified. "The rules should not prohibit electric utilities from allowing charges for nonelectric products or services from being included on utility bills when these goods or services are provided by a CRES or other separate entity," RESA and Direct said

"R.C. 4928.17 specifically allows an electric utility/EDU to include charges on the utility bill for nonelectric products and services offered by an affiliate of the utility (assuming all of the code of conduct requirements have been checked). If utilities are allowed to include their affiliates’ charges on a bill, non-affiliated entities must have access to the bill as well," RESA and Direct said

"Any final rules concerning non-commodity billing should be consistent with statutes that govern the same topic. An electric utility/EDU cannot lawfully offer 'non-commodity goods or services.' These services may only be offered through 'a fully separated affiliate' of the electric utility. There is really no reason to prohibit by rule that which is already prohibited by statute; i.e, the offering of non-commodity goods or services by an EDU. If the Commission is inclined to do so anyway, RESA and Direct have no objection," RESA and Direct said

In separately filed comments, IGS Energy said that, "Upon review, it is apparent to IGS that the Commission supports the ability of a CRES provider to place NCG&S [non-commodity good & services] on a UCB. Notably, while the Commission removed the requirement regarding disclosure of the name and telephone number of the provider of non-tariffed and non-regulated services in the EDU-only bill rule, the Commission maintained that requirement in the UCB bill format. Certainly, the Commission would not have removed this important consumer protection under the EDU-only bill unless the Commission intended to remove any and all NCG&S on this bill format. In contrast, by electing to keep the provision under the UCB rule, the Commission is signaling its desire to allow for non-commodity billing for certain parties."

However, IGS said that the rule language as proposed is problematic. "First, CRES providers need certainty regarding their ability to utilize the UCB for its NCG&S. Second, the lack of an affirmative requirement continues to place the ultimate decision of what can be placed on the bill with the EDU. In the UCB rule, charges from a “third party of the EDU” are prohibited from appearing on an UCB, but the rule is silent to charges from a third party supplier. This means, the EDUs may be free to include their own NCG&S (and are permitted under R.C. 4928.17) on the UCB but are under no obligation to include the same from a CRES provider. This could also result in different billing policies between the four EDUs, and in turn, limit product availability to those customers within the territories where CRES providers are unable to include NCG&S on an EDU-issued bill," IGS said

IGS proposed language for UCB stating that, "The consolidated bill format must include charges for non-commodity goods or services from an electric services company."

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