Utility Seeks To Terminate Retail Supplier's Participation In Choice Program

November 1, 2021

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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The East Ohio Gas Company d/b/a Dominion Energy Ohio (DEO or the Company) filed an application at the Public Utilities Commission of Ohio requesting authority to terminate or suspend Gasearch, LLC (Gasearch) from participation in DEO’s supplier program

Dominion Energy Ohio alleged in its filing that, "based on the facts known to DEO at the time of the Notice, Gasearch appears to have defaulted under at least the following conditions: (1) ECPS [Energy Choice Pooling Service] Terms Section 26.7 – Supplier does not intend to perform its obligations; and (2) ECPS Terms Section 26.12 - Failure to comply with Code of Conduct. The Notice also provides DEO’s proposed remedy."

Dominion Energy Ohio alleged in its filing as follows, "On Wednesday, October 20, 2021, DEO received an email from Gasearch president Susan Faith, informing DEO of Ms. Faith’s intention to retire and of 'selling/closing Gasearch' and requesting information on 'what options I may have and what steps I would need to take to make this happen.' The email informed DEO that Ms. Faith 'was looking to do this by the end of October.' The email also informed DEO, 'Since I am still not yet finalized with potential buyers, please keep this confidential for now.' A few minutes later, a DEO representative responded. DEO informed Ms. Faith of DEO’s assumption that Gasearch intended to sell its business or its 'book' of customers to another supplier; noted several necessary steps, including customer notices; and offered to discuss in greater detail the next day. The next morning, Thursday, October 21, 2021, the same DEO representative emailed Ms. Faith, indicating the inability to reach Ms. Faith via telephone earlier that morning. The DEO email expressly clarified that DEO could not transfer any customers by the end of October 2021 and that the earliest date DEO could fully process 'drop' orders or otherwise complete the transfer of customers would be December 2021. (Although not mentioned in the DEO email, this period of time is consistent with the 60-day notice period required for termination of the ECPS [Energy Choice Pooling Service] Agreement.)"

DEO further alleged, "DEO expected that additional discussions regarding Gasearch’s intentions to wind down its business would follow the week of October 25, 2021. Instead, early Monday morning, October 25, DEO received a communication from a third-party energy services company that 'We were notified Saturday evening by Gasearch that they are closing their doors effective October 31, 2021 and will no longer supply our customers with natural gas.'"

DEO alleged, "Gasearch’s communication that it intended to 'close its doors' by the end of October 2021 appeared to directly contradict DEO’s guidance two days earlier that it would not be possible to effectuate the orderly transfer of Gasearch’s customers until December 2021. Moreover, as of today [Oct. 26], Gasearch still has not formally provided notice of cancellation of its ECPS Agreement, which requires at least 60 days’ notice of cancellation. Moreover, DEO is not aware that any notice of abandonment has been filed under the rules of the Public Utilities Commission of Ohio ('PUCO'), which require at least 90 days’ notice prior to the cessation of service."

DEO alleged that, "Gasearch appears to have defaulted under at least the following conditions:

1. "Section 26.7 – Supplier does not intend to perform its obligations."

2. "Section 26.12 – Failure to comply with Code of Conduct". DEO alleged, "At a minimum, Gasearch has failed (or appears imminently set to fail) to conduct its business in accordance with OAC 4901:1-27-12 concerning the transfer or abandonment of its certificate, which in turn would violate ECPS Section 24.1. This rule requires PUCO approval prior to either the transfer of business or the abandonment of service."

Without limiting the foregoing, Gasearch is hereby informed that DEO intends to exercise any and all rights it may hold against Gasearch under the ECPS T&Cs, including but not limited to the use of Gasearch’s assets to secure the payment and performance of Gasearch’s obligations under the ECPS Agreements and service to Gasearch’s customers.

Without limiting DEO’s foregoing rights, Gasearch is hereby notified that effective immediately, DEO intends to (1) withhold any payments to Gasearch arising from its billing of commodity service on behalf of Gasearch and (2) retain any storage inventory or other gas-in-kind of Gasearch’s. These restrictions will remain in effect until such time as the issues described in this Notice are satisfactorily resolved. DEO will consider the proportional release of such withheld payments, storage inventory, or other gas-in-kind (1) if DEO determines that Gasearch is committed to meeting its supply obligations and has a valid supply plan in place until such time as all of its customers have been transitioned to other gas suppliers or commodity sales services, and (2) to the extent DEO determines that Gasearch is in fact meeting such supply obligations.

In addition, if necessary, DEO may use the proceeds of any financial instrument provided by or on behalf of Gasearch to satisfy any Gasearch obligations under its Agreements, any claims DEO determines that it may have, or the costs of securing additional gas supplies (including of the gas supplies themselves, the costs of transportation, storage, gathering, taxes, and other related costs incurred in bringing those gas supplies into DEO’s system).

DEO said that, pursuant to PUCO rules, if the commission, or an attorney examiner, does not act within five business days after receipt of the request, DEO’s request to terminate or suspend shall be deemed authorized on the sixth business day, or no later than November 5, 2021.

DEO told PUCO that, "DEO would clarify that it intends to work with Gasearch to the extent practicable to effectuate the orderly transition of Gasearch’s customers to other natural gas suppliers or supply options. Assuming this application is approved by operation of law or otherwise, DEO does not intend to exercise any authority to terminate in such a fashion that would interfere with this transition. In particular, if deemed necessary, DEO may delay the termination of Gasearch from its Energy Choice program until all existing customers have been transitioned and the operational and financial obligations associated with Gasearch’s supply pools have been fully resolved."

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