PUC Sets Evidentiary Hearing On Motion To Change Default Service Structure
Consumers' Counsel Seeks To Re-establish Standard Choice Offer As Default Rate Customers, End Monthly Variable Rate Assignment Process To Retail Suppliers
Says Monthly Variable Rate Up to 300% Higher Than SCO, Over $9/MCF
Says Default Monthly Variable Rates A "Rip-off", Reflect "Price Gouging"
August 19, 2019 Email This Story Copyright 2010-19 EnergyChoiceMatters.com
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The Office of the Ohio Consumers' Counsel filed a motion with the Public Utilities Commission of Ohio to re-establish the competitively bid Standard Choice Offer (SCO) as the
default service for all choice-eligible residential customers at Dominion East Ohio, "so that they have the benefit
of competitive pricing without marketer price gouging."
While the SCO serves as the default rate for customers who have never shopped, customers whose contract with a retail supplier expires, or whose government aggregation ends, are, barring an affirmative choice (including an affirmative return to the SCO), placed on the SCO for two months. After such time, if the customer has not made an affirmative choice, the customer is assigned to a retail supplier and is charged the supplier's Monthly Variable Rate
"The Monthly Variable Rate
should be eliminated as a program for assigning residential consumers to a natural gas
marketer when they end service with another marketer," OCC said
PUCO has set a procedural schedule in the case that includes a November 5, 2019 evidentiary hearing on the matter, to determine whether
Dominion Energy Ohio’s standard choice offer should be
re-established as the default service for residential and nonresidential
customers who have not selected a competitive retail
natural gas supplier and whether the rotating list of suppliers
offering a monthly variable rate should be eliminated.
PUCO's schedule includes deadlines for motions contra and direct testimony.
OCC said that its proposed change is needed to protect customers, "from a rip-off
perpetrated by some energy marketers in Dominion's service area," calling some Monthly Variable Rates, "outrageously high."
"The number of residential consumers on the Monthly Variable Rate at any point
in time may be few. But the harm to customers resulting from their random assignment
by Dominion to a marketer's high Monthly Variable Rate can be great. For example, on
August 14, 2019, seven marketers were charging Monthly Variable Rates that ranged
from 150% to 292% above Dominion's Standard Choice Offer effective for the same
period (August 14, 2019 through September 13, 2019). In addition, none of the 28
Monthly Variable Rate offers (excluding promotional and introductory offers) were
below Dominion's SCO rate for the same period on the PUCO's Apples-to-Apples chart," OCC said
period of August 14 through September 13, 2019, Dominion's Standard Choice Offer
was a low $2.36 per MCF for consumers. Meanwhile, the various Monthly Variable
Rates ranged from $2.49 to $9.25 per MCF, with an average price of $4.52 per MCF. For a typical consumer using 9 MCF of natural gas per month, the difference between a
marketer's high (and outrageous) rate of$9.25 per MCF and Dominion's standard choice
rate of $2.36 per MCF would on average be about $62 per month on a consumer's bill," OCC said
"If marketers were forced to compete with the lower-priced Standard Choice
Offer instead of the Monthly Variable Rate, they would be better incentivized to improve
their service and/or lower their rates to attract Ohio customers. The more expensive
Monthly Variable Rate does not provide those incentives for consumer protection,
especially when customers default to the Monthly Variable Rate and are assigned to
random marketers. Instead, the Monthly Variable Rate is resulting in excessive charges
for some consumers," OCC said
OCC said that through July 2019, aggregate shadow-billing information collected by Columbia
Gas over the last 20 years shows customers who shopped with marketers paid over $1.7 billion more than
customers who remained on Columbia's Standard Choice Offer [or otherwise applicable default] rate.
OCC said that PUCO should require other utilities to shadow bill shopping customers so similar comparisons can be made at other LDCs such as Dominion