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NOPEC Responds To PUCO Show Cause Order, Moves To Dismiss Dynegy Complaint

September 29, 2022

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Copyright 2010-21
Reporting by Paul Ring •

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The Northeast Ohio Public Energy Council (NOPEC) filed a response to a prior show cause order issued by the Public Utilities Commission of Ohio, while also moving to dismiss a complaint filed against NOPEC by Dynegy Marketing and Trade, LLC

The cases relate to NOPEC's decision to return about 550,000 opt-out aggregation electricity customers to the standard service offer

See background on the show cause order here

PUCO, among other things, cited two issues in its show cause order. PUCO, "distinguishe[d] between NOPEC’s customers, who in good faith enrolled in the aggregation based upon representations of energy savings," and further said, "The record is not clear whether the decision of NOPEC and NextEra to not match the SSO price, and thus follow through on their prior representations."

PUCO also suggested that NOPEC's actions were not consistent with its Plan of Operation and Governance (POG) which PUCO said, "do not appear to allow for the return to customers under these circumstances and require a 90-day notice to customers prior to being returned to SSO service."

With respect to aggregation pricing, NOPEC responded that, "[PUCO's] Entry incorrectly alleges that NOPEC had made a commitment to Aggregation Program customers that it would 'match the SSO price.' To be abundantly clear, NOPEC has not made such a commitment during the current Aggregation Program."

"On more than fifty (50) occasions since January 2020, NOPEC has filed for Staff and PUCO review its opt-out notices that describe the three products it is offering and their pricing. None of the opt-out notices made a commitment to match the SSO," NOPEC said

NOPEC said that its POG states that pricing, "is expected to be lower than the utility's standard offer generation charge over the duration of the Aggregation Program"; however, NOPEC further stressed that, "it never made a commitment to match the SSO in any of the opt-out notices reviewed by PUCO Staff during the program term."

With respect to the POG notice and termination provisions, NOPEC said that it, "did not violate its POG’s 90-day notice provision because the provision is not applicable to the return of Standard Price customers to the SSO."

"NOPEC’s Plan of Operation and Governance provides that individual customers will be notified 90 days before their return to the SSO in only two specific circumstances: (1) when the aggregation program’s power supply contracts are terminated or expire for all member communities and are not renewed, and (2) when a member community cancels its membership in NOPEC," NOPEC said

"Neither of these events occurred. NOPEC’s Aggregation Program for the January 2020 to January 2023 term offered three individual products to NOPEC customers: the Standard Price, the Monthly Variable Price, and the Fixed Term Price. Monthly Variable Price and Fixed Term Price customers continue to be served by the Aggregation Program’s existing supply contracts. Because the power supply contract for all member communities has not been terminated, and no member community has canceled its NOPEC membership for a period prior to January 2023, the 90-day notice provision in NOPEC’s POG simply is inapplicable," NOPEC said

NOPEC did note that PUCO's Entry, which referred to the most recent POG filed with PUCO, was actually an older document erroneously filed at such time

"To avoid any confusion, the September 7 Entry cites to the most recent filing of NOPEC’s POG on August 17, 2021, submitted when the City of Sebring joined NOPEC. Although this POG was the most recently filed with the PUCO, it actually is a prior version from October 2010. It was inadvertently filed in this docket by ministerial error. It is not the current November 14, 2017 version of the POG. NOPEC’s current POG was revised November 14, 2017, and was first filed with the PUCO the next day, November 15, 2017, and in NOPEC’s renewal certificate application on November 23, 2020. It most recently was filed in this docket on May 25, 2021, when Pittsfield Township joined NOPEC," NOPEC said

NOPEC further said, "While the Entry is correct that O.A.C. 4901:1-24-16(B) requires a POG to detail customer rights and obligations, nothing in that rule required NOPEC to include a provision in its POG that gives a 90-day notice (or any notice) to customers before providing them with a benefit."

"NOPEC violated no PUCO rule in returning its Standard Price customers to the SSO, and it did not violate its own POG. NOPEC had no control over the events that caused electricity prices to spike in 2022. NOPEC’s commitment to ensure that all of its Standard Price customers received the same benefit of lower electricity prices reflects positively on its managerial capability and is not cause to suspend its certificate," NOPEC said

NOPEC further said, "The Entry also alleges that NOPEC’s premature return of customers to the SSO is a potential cause to suspend its certificate. NOPEC’s current aggregation program runs from January 2020 to January 2023, and its Standard Price customers were returned to the SSO beginning in late August and into September 2022. The Entry cites no provision of law that NOPEC allegedly violated by the return and, as stated above, nothing in the PUCO’s rules, or in NOPEC’s POG, prevented it."

"Moreover, Section 5 of the Agreement Establishing the Northeast Ohio Public Energy Council ... gives NOPEC authority to take any necessary and incidental actions to effect and carry out the purposes of the Aggregation Program for the benefit of the Members and their respective electricity consumers. This authority includes NOPEC’s decision to return Standard Price customers to a more favorable standard service offer price for the benefit of NOPEC members and consumers," NOPEC said

"NOPEC notes that the Show Cause Entry refers to NOPEC’s and NextEra’s 'responsibility for the circumstances surrounding the request for waiver,' i.e., the early return of customers ... NOPEC had absolutely no control over the circumstances that led to the dramatic increase in the market price of electricity worldwide in 2022. No one did," NOPEC said

NOPEC noted that PUCO's Entry also expressed concerns that NOPEC’s return of Standard Price customers to the SSO and the uncertainty of the timing of their subsequent enrollment in a new NOPEC aggregation program will somehow harm SSO customers by increasing the SSO price. "Although unclear, the Entry seems to suggest that NOPEC may have engaged in anti-competitive conduct (O.A.C. 4901:1-24-13(E)(9)) by using market power (R.C. 4928.02(I)) to increase the SSO price. To be clear, NOPEC’s actions were only taken to benefit all Standard Price customers by moving them to the lower-priced SSO. NOPEC had no anti-competitive intent or ability. The potential for customers to return to the SSO is an inherent and known risk of the current market design, which allows customers to return freely to the SSO. Customers were electing to return in large numbers, irrespective of NOPEC’s actions," NOPEC said

NOPEC had originally indicated that the program will resume for the standard price customers in the spring of 2023. NOPEC clarified that it will be filing its renewal certification application at the end of this year.

"Subject to PUCO approval, NOPEC intends to re-enroll customers into its new program for a June 2023 start date. Assuming PUCO approval, a known June 2023 start date is beneficial to future SSO auctions as it would provide certainty to SSO suppliers that NOPEC's load will not be included in the SSO auctions for the 2023/2024 Delivery Year," NOPEC said

A PUCO attorney examiner issued a ruling finding that the discovery process related to the NOPEC's certification case (the same case as the show cause proceeding) shall continue until further order. NOPEC had argued for a stay of discovery until the show cause process initiated by the Commission’s September 7, 2022 Entry has been completed. The attorney examiner expressly did not yet rule on such motion (awaiting replies) but directed that, in the interim, discovery should continue unimpeded until otherwise ordered

Separately, NOPEC also filed a motion to dismiss a complaint filed against NOPEC by Dynegy Marketing and Trade, LLC

See background on the complaint here

In moving to dismiss, NOPEC alleged, among other things, that Dynegy cited rules inapplicable to governmental aggregators

NOPEC said that it fully lists and explains fees and charges

NOPEC quoted that applicable rule for governmental aggregators as providing that, "If the governmental aggregator offers a variable rate, the governmental aggregator shall provide an understandable description of the factors that will cause the price to vary (including any associated indices) and disclose how frequently the rate will change."

NOPEC said, "NOPEC’s [sic] has complied with the rule. Each of its Opt-Out Notices mailed during the term of this Aggregation Program explained: 'Supplier and NOPEC will determine the new variable rate based on the following factors: competitor’s prices, applicable industry charges, wholesale market conditions and electric supply sources.'"

NOPEC further said that certain of Dynegy’s allegations relating to alleged unfair, misleading and deceptive practices, "attempt to vest in the Commission jurisdiction that it doesn’t have -- to examine allegedly 'unfair' conduct between market participants."

"Although the Commission has jurisdiction over the relationship between CRES providers and their customers (R.C. 4928.10), it lacks jurisdiction over the relationship between a CRES provider (i.e., NOPEC), and its electricity supplier, or any other vendor," NOPEC said

Case No. 00-2317-EL-GAG; Case No. 22-817-EL-CSS


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