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PUC Approves Settlement Under Which Utility Commits To Transition To Wholesale Auction For Default Service From Managed Portfolio

PUC Dismisses Retail Supplier Objections

Settlement Requires Auction Proposal Include Provision That Price To Compare Be Listed On Shopping Customers' Bills

April 20, 2022

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Copyright 2010-21
Reporting by Paul Ring •

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The Public Utilities Commission of Ohio approved today, without modification, a settlement in several Duke Energy Ohio environmental cost and tax cases under which Duke has committed to filing an application to transition to a wholesale Standard Service Offer auction to procure natural gas supplies for non-shopping customers, and, as part of such application, seek approval to include a price to compare message on shopping customers' bills

The settlement had been exclusively first reported by last August. As noted in our prior story, Duke has already provided notice of its intent to file an SSO transition application, and has been conducting stakeholder meetings.

As previously reported, the proposed auction will be a wholesale SSO auction and not a standard choice offer (SCO). In the latter SCO mechanism the supplier serves the specific retail customer, rather than wholesale load

The settlement also provides that, as part of the SSO application, Duke shall seek approval to include a price to compare message on the bills of shopping customers

Under the stipulation, the Price-to-Compare message on bills for shopping customers shall prominently include language similar to the following: "In order for you to save money, a natural gas supplier must offer you a price lower than $X.XX per CCF for the same usage that appears on this bill."

Also under the stipulation, Duke Energy Ohio agreed to begin providing the OCC with shadow billing information for natural gas customers

See a full discussion of the settlement's terms and SSO proposal in our prior story here

Retail suppliers objected to the settlement's inclusion of the above-described retail market provisions as "wholly unrelated" to the environmental and tax cases which were before PUCO

Retail suppliers also objected that the inclusion of the SSO and price to compare provisions in the settlement amount to a fait accompli and that, through the terms in the stipulation, the Signatory Parties are asking for approval here and now of the framework for the SSO auction and the PTC language from which Duke will then proceed.

Retail suppliers also argued that, transitioning from the GCR, without implementing a Standard Choice Offer (SCO), negatively affects the competitive market.

Addressing retail suppliers' concerns about fait accompli, PUCO said, "In response to the arguments raised by RESA/IGS, Duke contends that two of the competitive market provisions, i.e., the commitment to file an application to transition from the GCR mechanism to an SSO and the commitment to include within that application proposed price-to-compare messaging to be included on customer bills, are merely commitments to file the proposals in a future proceeding. The Commission agrees and finds these provisions of the Stipulation to be of no adverse consequence to the opposing parties or the retail market, in general. Any intervenors in that case will be afforded an opportunity for input and comment on the eventual SSO application. The Commission will, at that point, fully consider the SSO application and the comments before any decision is reached in that case."

"We, therefore, decline to eliminate these provisions from the Stipulation. Furthermore, it appears these commitments and related settlement terms merely state what was agreed upon during settlement negotiations as to what, at a minimum, should be included in the Company’s subsequent application to transition from the GCR mechanism to an SSO. We emphasize that our decision today does not predetermine any outcome related to that subsequent application and, as stated by Duke, the Commission remains free to approve, modify, or reject whatever the Company may ultimately file," PUCO said

"To reiterate our earlier findings, the Commission takes no position today on the merits of these terms and our decision in these proceedings should not be construed as a predetermination of the outcome in In re the Application of Duke Energy Ohio, Inc. for Approval of a General Exemption of Certain Natural Gas Commodity Sales Services or Ancillary Services, Case No. 21-903-GA-EXM, et al. We merely find that the commitments in the Stipulation are not unlawful or unreasonable," PUCO said

"The Commission will thoroughly review the application eventually filed in Case No. 21-903-GA-EXM following an opportunity for input and comments from interested stakeholders, including RESA/IGS if they choose to participate," PUCO said

"Similarly, we also find baseless the arguments raised by RESA/IGS that Paragraphs 35 and 36 of the Stipulation somehow bind the Commission’s decision in the eventual SSO application. Pursuant to the terms of the Stipulation, that future application is required to be approved through a subsequent proceeding after due process has been afforded to all interested parties (Duke Ex. 6 at 14; Duke Ex. 7 at 20). We will not speak to the merits of that application, the preliminary contents of which are described in the Stipulation (Joint Ex. 1 at 16-19). Rather, we will focus on the terms subject to our approval today," PUCO said

"In response to arguments that the competitive market provisions fall outside the enumerated scope of the Duke MGP [environmental] Proceedings and the Duke TCJA [tax] Proceedings, we agree with Duke that there are many Commission proceedings, including proceedings which specifically relate to the TCJA, where stipulations included provisions not directly related to the reason the proceeding was originally initiated. As such, the fact that the directives in the Duke MGP Proceedings and the Duke TCJA Proceedings, or the Orders in the 2012 Rate Case and the TCJA Investigation, did not explicitly state that parties could consider competitive market provisions is irrelevant for our purposes here today. A stipulation has been submitted for our consideration, pursuant to Ohio Adm.Code 4901-1-30, and we have evaluated whether that Stipulation satisfies our three-part test in this Opinion and Order," PUCO said

With respect to the shadow billing data provided to OCC, PUCO said, "The Commission finds that no valid reason has been presented to justify elimination of the shadow-billing provision from the Stipulation pursuant to part two of the test to evaluate stipulations. Even still, and as the Commission noted in the Ohio Power Rate Case, the report of shadow-billing data 'may serve to confirm information otherwise available about the competitive market or highlight issues for further review and analysis.' We similarly find that the provision of this data may benefit ratepayers and the public interest, and it is, therefore, reasonable as a term within the Stipulation’s package. However, as noted in the Ohio Power Rate Case and within testimony presented by RESA/IGS witness Lacey, the Commission reiterates that customers may choose an energy provider for various reasons and that price is only one attribute of any offer available in the competitive market; there may be other features of the offer that are of value to customers."

In evaluating whether the settlement benefits customers, PUCO noted that the Stipulation, "provides a significant benefit with the resolution of 18 total proceedings addressing cost recovery of more than $85 million in MGP remediation costs, while lowering customer rates and providing bill credits to natural gas customers."

Case 20-0054-GA-ATA et al.

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