PUC Ends Monthly Assignment Program For Mass Market Customers Without A Supplier, Reinstates Auction-Based Rate As Default Option For Small Non-Residential Customers

Current Small Customers Of Retail Suppliers Under Monthly Variable Assignment Program Will Be Transferred Back To Utility-Procured Standard Offer

For Larger Customers Assigned Under Monthly Rate Program, Customers Will Now Be Re-assigned Every 12 Months

Rate Cap Now Imposed For Monthly Assignment Program

New Fee Imposed On Retail Suppliers

Suppliers Must Now Meet New Minimum Size Threshold To Participate In Customer Assignment Program

February 26, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

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The Public Utilities Commission of Ohio approved without modification a stipulation among retail suppliers, the Ohio Consumers' Counsel, Staff of the Public Utilities Commission of Ohio, and Dominion Energy Ohio (Dominion) revises Dominion's current monthly variable rate program (MVR), with a termination of the program for small volume customers, and the reinstatement of the Standard Choice Offer (SCO) for small non-residential customers This stipulation had previously been first reported by EnergyChoiceMatters.com

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The current applicability of the SCO and MVR at Dominion Energy Ohio varies by customer class.

For residential customers, the SCO is the default service provided to choice-eligible customers who have never shopped (or who elect the SCO service). Under the SCO, a retail auction is conducted to set an SCO adder to NYMEX prices, with winning retail suppliers awarded the right to serve specific SCO customers at the NYMEX price plus the adder

For residential customers who have shopped (including via municipal aggregation) and whose service with a supplier is then terminated, the customer is placed on the SCO rate for two months. If the customer does not take affirmative action after two months, the customer is assigned to a retail supplier, based on a rotating list, with the customer charged that supplier's Monthly Variable Rate (MVR program). The MVR rate can not exceed any of the supplier's rates listed on the PUCO's Apples to Apples chart. However, some suppliers have listed on Apples to Apples a single rate that is nearly four times the SCO rate.

For non-residential customers, there is no SCO. Any non-residential customer without a supplier selected by the customer or through opt-out aggregation is assigned to a supplier under the MVR program.

The settling parties stipulate that the MVR program, "has been subject to a wide range of posted prices, some of which have been considerably above the competitive retail natural gas offers available to customers, and has been the subject of customer confusion and complaints[.]"

In previously filed comments, PUCO Staff supported ending the MVR program for all customers, citing MVR offers that Staff had said were, "unreasonably high." See our prior story for more background on calls to end the MVR program

The stipulation adopted by PUCO ends the MVR program for residential customers, and requires that residential customers currently with a supplier under the MVR program be transferred back to the SCO

Specifically, the approved stipulation provides that Dominion's SCO Commodity Service tariff shall be the default commodity service for Dominion's Choice-eligible residential customers ('residential customers') who have not selected and enrolled with an Energy Choice Supplier or do not participate in a governmental aggregation program, including but not limited to new residential customers after up to two consecutive billing periods on the SSO [Standard Service Offer] and those residential customers returning to the SSO for up to two consecutive billing periods after termination of their Energy Choice contract or participation in a governmental aggregation program.

The adopted stipulation provides that not later than 60 days after a Commission order approving the Stipulation without material modification, Dominion shall transfer to the SCO the residential customers currently assigned to an MVR Supplier. If the transfer of such customers is not implemented in conjunction with the SCO/SSO auction process, Dominion's transfer of the MVR-assigned residential customers to the SCO shall be in accordance with the current SCO assignment mechanism utilized by Dominion for assigning new residential customers to the SCO.

With respect to small non-residential customers, the approved stipulation provides that Dominion's SCO shall be the default commodity service for Dominion's Choice eligible non-residential customers whose annual consumption is less than or equal to 200 Mcf ('small non-residential customers') and who have not selected and enrolled with an Energy Choice Supplier or do not participate in a governmental aggregation program, including those non-residential customers returning to the SSO for up to two consecutive billing periods after termination of their Energy Choice contract or participation in a governmental aggregation program.

The stipulation states that Dominion's transfer to SCO service of small non-residential customers currently assigned to an MVR Supplier shall commence not later than 120 days after a Commission order approving the Stipulation without material modification. Dominion's transfer of the MVR-assigned small non-residential customers to the SCO shall be in accordance with the current SCO assignment mechanism utilized by Dominion for assigning new customers to the SCO.

New small non-residential customers will receive at least one SSO bill and may select and enroll with an Energy Choice Supplier or participate in a governmental aggregation program, the stipulation provides. If they do not do so, such customers will, after their second SSO bill, be assigned to a participating SCO Energy Choice Supplier at the price established in the retail SCO auction under the standard terms and conditions of SCO Commodity Service included in Dominion's tariff.

Customers that continue to qualify annually as small non-residential customers shall continue to default to the SCO Commodity Service unless they select and enroll with an Energy Choice Supplier or participate in a governmental aggregation.

The adopted stipulation provides that Dominion shall provide a notice to residential and small non-residential customers currently in the MVR program informing customers that they are being transferred to the SCO, that they have commodity service options, and that they may contact the PUCO, OCC (for residential customers), or Dominion for information about the transfer.

Under the adopted stipulation, the current Monthly Variable Rate Commodity Service tariff shall be replaced with the Monthly Retail Rate Commodity Service tariff, also known as the MRR program, which shall only be applicable to non-residential consumers whose annual consumption is greater than 200 Mcf.

With respect to medium non-residential customers, the adopted stipulation provides that the MRR program shall be the default commodity service for all non-residential Dominion consumers whose annual consumption is greater than 200 Mcf and less than or equal to 500 Mcf ('medium non-residential customers').

However, the approved stipulation provides that medium non-residential customers shall also have the option of receiving natural gas supply through the SCO, as well as participating in an applicable governmental aggregation program, or selecting and enrolling with an Energy Choice Supplier.

Unlike for small customers, the adopted stipulation provides that a medium non-residential customer that currently receives natural gas commodity service under the MVR program shall continue to receive natural gas commodity service through the MRR program until the customer elects to receive natural gas commodity service through the SCO, to participate in an applicable governmental aggregation program, or to select and enroll with an Energy Choice Supplier.

New medium non-residential customers and medium non-residential customers returning to the SSO after termination of their Energy Choice contract or participation in a governmental aggregation program will receive at least one SSO bill, after which they may elect to receive natural gas supply through the SCO, to participate in an applicable governmental aggregation program, or to select and enroll with an Energy Choice Supplier. If they do not make one of the foregoing elections, such customers will, after their second SSO bill, be assigned to a Supplier participating in the MRR program.

With respect to large non-residential customers, the adopted stipulation provides that the MRR program shall be the default service for non-residential customers whose estimated annual consumption is greater than 500 Mcf ('large non-residential customers').

Unlike with medium customers, the adopted stipulation provides that large non-residential customers shall not be eligible to receive natural gas commodity service under the SCO. Large customers shall have the option of participating in an applicable governmental aggregation program (if eligible) or selecting and enrolling with an Energy Choice Supplier.

New large non-residential customers and large non-residential customers returning to the SSO after termination of their Energy Choice contract or participation in a governmental aggregation program will receive at least one SSO bill, after which they may elect to participate in an applicable governmental aggregation program or to select and enroll with an Energy Choice Supplier. If they do not make one of the foregoing elections, such customers will, after their second SSO bill, be assigned to a Supplier participating in the MRR program, the stipulation provides

The approved stipulation also includes new eligibility conditions for suppliers to participate in the MRR program for medium and large non-residential customers

Specifically, to participate in the MRR program, a supplier must now meet the following criteria and abide by the following terms:

(a) The supplier must have at least 100 non-MRR, non-SCO Energy Choice customers under contract for competitive retail natural gas service or must be serving at least 10,000 MCF of non-MRR, non-SCO Energy Choice annual load, beginning one year from the date of an order approving the Stipulation without material modification

(b) An MRR Supplier having assigned customers must serve its assigned customers each month until at least the end of the following March billing cycle subject to disqualification as described in division (d) below

(c) The MRR Supplier must post on the Commission's Energy Choice Ohio website a monthly variable rate offer each month during the period of its participation in the MRR program

(d) Without limitation to other remedies that may be warranted as a result of non-MRR tariff violations, an MRR Supplier that fails to serve its existing customers at a price at or below a applicable monthly median price established under the stipulation (described below) or notifies Dominion of its intent to no longer serve under the MRR program prior to the March billing cycle shall be disqualified from participating in the MRR program. The disqualification period shall begin with the month that the MRR Supplier notifies Dominion that it will not provide natural gas commodity service to its existing MRR program customers at a price at or below the monthly median price and continue through the next March billing cycle and then an additional 12-month period

(e) MRR Suppliers with a posted monthly variable rate equal to or below the monthly median MRR price shall be eligible to be assigned and provide supply to those assigned customers at the lower of the Supplier's lowest posted monthly variable rate price or the MRR price in the next service month as determined by DEO billing cycles

(f) To avoid disqualification, an MRR Supplier that is not assigned customers for a service month because it did not offer a price equal to or below the monthly median MRR price must charge its previously assigned customers a rate that is no more than the monthly median MRR price.

The approved stipulation will establish a median MRR price which, as noted above, MRR suppliers will be required to meet or beat to receive an assignment of customers. As noted above, the actual price charged by the supplier will be the lower of its lowest posted monthly variable rate price or the MRR price

Under the stipulation, the monthly median MRR price will be determined each month from the lowest submitted monthly variable rate from each qualifying MRR Supplier. For example, if there were 21 suppliers, the monthly median MRR price would be the rate of the supplier with the 11th lowest rate. In the event the median monthly MRR price is based on an even number of Suppliers, the average of the middle two prices shall constitute the median.

The adopted stipulation provides that Dominion shall reassign, once every 12 months, each MRR customer who has been assigned to the same MRR Supplier for the 12 prior consecutive months.

Under this provision, the identification of customers shall take place annually and reassignment shall be effective with the April billing cycle. Any MRR Supplier can be eligible to receive assignment of these customers. The Signatory Parties acknowledge and accept that, through this stipulated random reassignment process, it is possible that an MRR customer could be reassigned to the same MRR Supplier.

The stipulation provides that, at least one billing cycle before an assignment or a reassignment, Dominion shall provide notice, which may be completed by bill insert, bill message, or other reasonable method, to the non-residential customer who is subject to random assignment to an MRR Supplier through the MRR program that the customer will be randomly assigned or reassigned to an MRR Supplier if the customer does not choose to receive natural gas commodity supply service through the SCO (subject to customer eligibility), an Energy Choice Supplier, or a governmental aggregation program.

The stipulation provides for development of a customer education program, with a new fee charged to retail suppliers to provide funding for the program

Specifically, the adopted stipulation provides that, within 60 days after an order approving the Stipulation without material modification or other time period mutually agreed upon by the Signatory Parties, the PUCO Staff shall convene a collaborative meeting of interested stakeholders to discuss the development of a consumer education program designed to help Choice-eligible customers, including customers who are participating in the MRR program, compare options for natural gas service and understand how those options can affect the information on their natural gas bills in Dominion's service territory. Focus groups and surveys shall be conducted to assess why customers who were in the former MVR program for over 12 months did not affirmatively make a supply choice. The content and approach of any focus groups and surveys will be developed through the collaborative group, which will have access to the results of any focus groups and surveys. Collaborative group members, including Signatory Parties, may seek a resolution from the PUCO regarding customer education issues, including notices to customers.

The stipulation provides that Dominion shall use existing education funds to provide (a) notices to customers that are to be assigned or reassigned as a result of the implementation of this Stipulation and (b) consumer education and other activities described above.

However, the approved stipulation provides that additional funding for the customer notices, consumer education, and the activities described above shall be funded through a new fee on retail suppliers.

Specifically, the adopted stipulation provides that, beginning December 1, 2021, and subject to Commission approval of any necessary changes in its tariff, Dominion shall assess the fee in the amount of $0.01/Mcf to all Suppliers participating in Dominion's Energy Choice program, to all Suppliers of governmental aggregations in Dominion service territory, participating in the MRR program, and to the Suppliers awarded tranches through the SCO or SSO auctions. The fee will continue to be assessed to Suppliers for all such volumes billed prior to the first billing cycle in December 1, 2025 [sic].

The stipulation provides that the Signatory Parties agree that they shall not individually or jointly request Commission approval for Dominion to exit the merchant function or to modify the MRR program structure for any of Dominion's consumers prior to July 1, 2023.

Signatory Parties include the Ohio Consumers' Counsel (OCC), Ohio Partners for Affordable Energy (OPAE), the Staff of the Public Utilities Commission of Ohio (Staff), Retail Energy Supply Association (RESA), Direct Energy Business Marketing, LLC, Direct Energy Services, LLC (collectively, Direct”), Interstate Gas Supply, Inc. (IGS), Dominion Energy Solutions, Inc. (DES), and The East Ohio Gas Company d/b/a Dominion Energy Ohio (Dominion)

Case No. 18-1419-GA-EXM

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