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

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Reporting by Paul Ring • ring@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.

As exclusively first reported by EnergyChoiceMatters.com, OCC had previously sought the termination of the MVR program

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

"[F]or the 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

Case No. 18-1419-GA-EXM

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