Utilities Oppose Proposed Switch Block Mechanism, Inclusion Of Price To Compare Statement On Bills
Utilities Say Price To Compare Language Inappropriately Positions The Utility As An Energy Advisor, Implies Default Service The "Most Favorable" Rate
Consumer Counsel Recommends Penalty For Spoofing Be Revocation Of Retail Supplier's License
Consumer Counsel Seeks To Include Comparison Of Shadow Billed Costs On Bills
January 16, 2020 Email This Story Copyright 2010-20 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
The following story is brought free of charge to readers byEC Infosystems, the exclusive EDI provider of EnergyChoiceMatters.com
Several Ohio natural gas utilities filed comments in opposition to a proposed switch block mechanism, and a proposal for price to compare language to appear on bills, which are contained in a draft Public Utilities Commission of Ohio rule on natural gas utility billing, including consolidated billing
Price To Compare On Bills
As first reported by EnergyChoiceMatters.com, the draft rule would require that utility natural gas bills (including consolidated bills) shall include the following price to compare statement: "In order for you to save money by selecting a competitive retail natural gas provider, your price to compare, which is the standard choice offer (SCO) rate or the gas cost recovery (GCR) rate, is (dollar amount per Mcf) for this billing month. The SCO rate or GCR rate is approved by the public utilities commission." [sic]
In jointly filed comments, Dominion Energy Ohio (DEO) and Vectren Energy Delivery of Ohio, Inc. (VEDO) stated of the proposed requirement for a Price to Compare statement to be included on bills that, "The Companies do not support this proposed revision, for several reasons.
First, the Companies do not believe the statement as proposed is accurate; second, the
Companies do not believe the proposal is consistent with state energy policy and company
specific code-of-conduct requirements; and finally, adopting the rule would require significant
programming and bill changes, which are not justified given other concerns."
DEO and VEDO said that, "The statement is not necessarily true. Regarding the accuracy of the statement, it is not
necessarily true that a customer will save money based on a comparison with the SCO."
DEO and VEDO further stated the following concerning the price to compare language proposal:
• "The SCO is a variable rate and changes every month, depending on the prevailing
market price of natural gas. Since the SCO is a variable rate, a fixed-rate offer may exceed the SCO at the time of initial rate comparison, but save money over time
depending on the market price of gas."
• "There is a lag between the printing of bills and when a customer is actually enrolled
in a given offer. What the SCO is at the time a bill prints will almost certainly not be
the same as it is at the time a customer makes a rate comparison or actually enrolls in
a given service."
• "If a customer is under contract and subject to early termination fees, that would also
affect whether they would “save money” by enrolling in the SCO."
• "A pure comparison to the SCO may not reflect benefits a competitive supplier may
be offering via a bundled service."
• "Not all customers are eligible for the SCO, so the statement could create confusion."
DEO and VEDO further stated, "The statement raises concerns regarding state energy policy and company-specific codes
of conduct. The Companies are also concerned that the proposed statement is contrary to the state
energy policy encouraging competitive markets. Under R.C. 4929.02(A)(7), Ohio’s policy is to
'[p]romote an expeditious transition to the provision of natural gas services and goods in a
manner that achieves effective competition and transactions between willing buyers and willing
sellers to reduce or eliminate the need for regulation of natural gas services and goods under
Chapters 4905. and 4909. of the Revised Code.' Contrary to this policy, the proposed statement
implies that the rate 'approved by the public utilities commission' is the most favorable."
DEO and VEDO further stated, "The Companies are also concerned that including this statement on the bill would create
code-of-conduct concerns. The Companies are required to (and do) take a position of neutrality
with respect to a customer’s choice for commodity service. If customers call the Companies and
appear to be seeking advice regarding commodity service, the Companies refer them to generally available resources, such as the PUCO Apples to Apples webpage, and do not provide customer-specific
advice. Contrary to these efforts, the proposed statement would effectively position the
utility as an energy advisor and could be read to encourage customers at a minimum to call the
Companies for advice and even to select the SCO rather than a supplier offer. The Companies do
not believe they should be placed in that position, but that is the effect this statement would
DEO and VEDO further stated, "Inclusion of the statement would impose significant programming costs. Given the issues
identified above, the Companies would not recommend this change even if it could be made
without cost. Including the proposed statement, however, would impose significant incremental
costs. The lengthy statement would also consume a large amount of space on the bill. For DEO
specifically, the space on its bill is already effectively maxed out. Unless existing information is
removed from the bill, including this statement would require either wholesale reformatting of
DEO’s bill presentation or adding a second page to DEO’s bill. Additionally, many of DEO’s
customers are not currently eligible to shop or to select SCO service (e.g., PIPP customers,
customers with arrearages who have broken more than one payment plan in the last 12 months,
nonresidential customers). Including the message on ineligible-customer bills would create
confusion, yet programming the bill message to vary based on eligibility factors would be a
major undertaking for DEO."
In separately filed comments, Duke Energy Ohio also expressed concerns with the price to compare language proposal
Duke stated, "Duke Energy Ohio has two concerns about this proposed rule change. First, and most
importantly, the opening phrase of the statement is incorrect and misleading. It blatantly suggests
to the customer that he can 'save money by selecting a competitive retail natural gas provider.'
But there is no evidence or assurance that a competitive service (CRNGS) provider will necessarily charge less per Mcf than the natural gas utility charges. Nor does state policy, as set forth in R.C.
4929.02, instruct the Commission to promote CRNGS providers' services over those of the natural gas utility. There is simply no reason for this phrase and it should be eliminated."
Duke further stated, "Furthermore, if the Commission determines that it is appropriate to move forward with a
required price-to-compare message, it is important to understand that it may take some time to
implement, depending on the timing of approval. Thus, if the Commission approves a change
similar to the one proposed by Staff, it should allow a reasonable amount of time for compliance
with that change."
The Ohio Consumers Counsel supported the inclusion of price to compare language on bills, offering modifications to the proposed language
OCC proposed the following price to compare language to appear on bills: "In order for you to save money, a competitive retail natural
gas supplier would have to offer you a rate that is lower than
your price to compare, which is the standard choice offer (SCO) rate or the
gas cost recovery (GCR) rate, is (dollar amount per Mcf) for this billing
month. The SCO rate or GCR rate is approved by the public utilities
OCC further said that the PUCO should adopt a rule that requires natural gas utilities to conduct
shadow-billing, with such information presented on bills
OCC said that, "Based on a review of the choice offers that are available for residential customers on the Energy Choice
Ohio website, very few of the offers can save money for customers. There are 286 total natural gas offers
available to customers in COH, DEO, Duke, and VEDO’s service territory as of January 13, 2020. Out of
those offers, there are thirty-six offers (or 12.6%) that were the same or lower than the utility SCO (or
GCR) rate. Excluding introductory teaser rates and variable rate offers with terms of one or two months, a
total of 26 offers (or 9%) of the total statewide offers provided any opportunity for customers to save
money on their natural gas (or at least not lose money)."
OCC said that, "The shadow-billing data from Columbia Gas show, as of July 2019, that its million consumers have paid
$1.7 billion more for marketer gas (since April 1997) than had they bought gas from Columbia. The Columbia Gas data, showing a huge transfer of wealth from Ohioans to gas marketers,
would suggest that something is broken and needs to be fixed for the protection of the public."
OCC said that the following shadow-bill statement should appear on shopping customer bills: "Your natural gas supply costs with (Name of Supplier) were ($ for the
month). Customers who were served on the (standard choice offer 'SCO')
or (gas cost recovery rate 'GCR') for the month paid ($ for the month) for
the same level of usage."
Retail suppliers opposed the draft proposal for including price to compare information on bills.
Switch Block Mechanism
As previously reported, the proposed rule would include a switch block mechanism
As proposed, the draft rule states, "Each gas or natural gas company will allow any customer to request a retail natural gas supplier block be placed on the customer’s account. The block will prevent the customer’s commodity service provider from being switched without the customer’s authorization (via customer provided code or pin number) to the gas or natural gas company. The release will be provided to the gas or natural gas company from the customer or other authorized person on the account."
Regarding the proposed switch block, DEO and VEDO stated, "This revision would impose significant programming and business-process costs on the
Companies. For customers who elect to place a block, it raises obstacles to shopping, as tracking
yet another passcode and making an additional phone call will be necessary to change suppliers.
These costs and inefficiencies would not appear warranted unless 'slamming' issues were or were becoming widespread. The Companies are not aware that this is the case, and without such
evidence the Companies are concerned that such changes are out of step with state energy policy.
Absent a compelling showing that the new functionality is clearly needed, the Companies do not
support this revision. As previously stated, if there have been any abuses, those issues should be
dealt with directly—addressing either the actor or the practice—not by universally imposing a
Columbia Gas did not oppose a switch block, but suggested a change concerning how a utility verifies a customer may remove a switch block
Columbia stated, "The Commission proposes a new rule allowing a customer to put a block
on his or her account to prevent switching to another retail natural gas supplier.
The Commission provides a parenthetical prescriptive method to ensure the customer
is placing the block on the account with either a customer-provided code or
pin number. These two methods, however, will require customers to remember
this pin, as well as IT changes to incorporate the record-keeping and protection of
this pin (in the event the utility is even permitted to keep it on file). In lieu of a
customer-provided code or pin number, Columbia suggests there may be a more
customer friendly solution -- a verified customer authorization. If a customer calls
into Columbia’s call center, Columbia verifies that the caller is the customer of
record. Once verified, Columbia would be able to place a block on the account,
with customer authorization, which would alleviate the customer from remembering
a code or a pin number."
Retail suppliers opposed a switch block mechanism
In opposing the switch block, Direct Energy Services, LLC and Direct Energy Business, LLC stated that the switch block would provide a competitive advantage to opt-out
Direct Energy stated, "The proposed block mechanism would ... provide a competitive advantage to opt-out
aggregators. Eligibility requirements for enrollment in an opt-out aggregation and an opt-out list
are set by Ohio Rev. Code § 4929.26. A customer who sets a block with the utility has not
'opted out' and would still be eligible for an opt-out aggregation enrollment without the need to remove a block. This process would advantage an optout [sic] aggregation provider over CRNGSs [retail suppliers] by
requiring additional steps for non-aggregation enrollments. The process would provide
preferential treatment to opt-out aggregators (in addition to the advantages that are set by
statute). The block mechanism could create confusion, as a customer may believe a block
prevents them from any enrollment, including an opt-out aggregation."
In its comments, OCC said that, "Spoofing [of caller ID] should result in a permanent rescission of a marketer’s certification by the
Prohibition On Including Non-Commodity Charges On Bills
As previously reported, the draft rules would modify Ohio Adm.Code 4901:1-13-11 to provide that residential utility bills may only contain charges for the natural gas commodity and tariffed distribution service.
Specifically, the draft rule provision, applicable to utility bills, would state, "Natural gas residential bills are to contain only charges that are either a natural gas or competitive retail natural gas commodity charge or an approved tariffed distribution charge or service."
DEO and VEDO opposed this proposed prohibition. "The Companies do not support the recommended prohibition on utility bills containing
non-service-related charges. If customers find it convenient to reduce the number of checks they
must write to pay for desired services, the Companies do not understand why this billing option
should be eliminated," DEO and VEDO said
Duke also opposed the proposed prohibition on the billing of non-commodity charges on utility bills. "Furthermore, Duke Energy Ohio understands that most of its customers prefer to receive
fewer bills, not more. Whether the charges being eliminated from a natural gas bill relate to electric
utility service, competitive electric providers' commodity services, or other charges, the customer
should have the ability to choose whether these items are all included on a single bill. If the
customer authorizes the inclusion of something other than natural gas distribution or commodity
service, there is no reason that it should be excluded, assuming that the utility in question properly
allocates costs and charges the billing entity for that service."
Retail suppliers also opposed the proposed prohibition on the billing of non-commodity charges on utility bills
Compliance With Ohio Law For Reduced Regulatory Burdens
Retail suppliers said that Staff's proposal does not comply with recently enacted Ohio Revised Code Section 121.95(F) which states that, "Beginning on the effective date of this section and ending on June 30,
2023, a state agency may not adopt a new regulatory restriction unless it
simultaneously removes two or more other existing regulatory restrictions.
The state agency may not satisfy this section by merging two or more
existing regulatory restrictions into a single surviving regulatory
The Retail Energy Supply Association noted that Staff’s proposals, such as the switch block and PTC information, "contain regulatory restrictions as
demonstrated by their use of the words 'shall,' 'must,' and 'require.'"
"The Commission should
not proceed to adopt Staff’s proposals without also removing regulatory restrictions as required
by this statute," RESA said
Direct Energy made a similar argument. Direct Energy further expressed concern that the proposed internal movement of certain rules into different chapters (and deletion of the former, since-moved chapter) may be an attempt to create a reduction in regulatory burden in compliance with the law, despite there being no substantive reduction in regulatory burden through such rule reorganization
submits that elimination of a duplicate provision or reference to a regulation should not count as
a reduction in regulatory restrictions. Such an approach would not meet the spirit of Ohio Rev.
Code Ann. § 121.95(F) to reduce regulations imposed on an industry," Direct Energy said