Utility, Retail Suppliers Reach Settlement On Proposal For New Carbon-Free Natural Gas Service To Be Provided By Retail Suppliers -- EnergyChoiceMatters.com

Utility, Retail Suppliers Reach Settlement On Proposal For New Carbon-Free Natural Gas Service To Be Provided By Retail Suppliers

Includes Agreement On Cost Recovery From Suppliers

March 29, 2023

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Reporting by Paul Ring • ring@energychoicematters.com

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The East Ohio Gas Company d/b/a Dominion Energy Ohio (DEO, Dominion or the Company) and several retail suppliers have entered into a stipulation to create a service meant to facilitate the optional purchase of "decarbonized" natural gas by customers from competitive retail energy suppliers

Staff of the PUC of Ohio and the Ohio Consumers' Counsel are not parties to the stipulation

Under the proposed Decarbon Ohio Program ("Program") set forth in the stipulation, certified Energy Choice suppliers would be responsible for the purchase and sale of carbon offsets and marketing carbon-offsetting rate offers to interested customers. DEO would facilitate the Program by fulfilling three roles: "(a) educating customers on the importance of sustainability and the general availability of carbon-offsetting rate offerings; (b) administering the Program, including initial and ongoing review of supplier eligibility and Program compliance, customer enrollment, and the creation and maintenance of customer portals; and (c) validating that suppliers obtained sufficient certified carbon offsets to fully offset emissions associated with enrolled customers. The Program would be a voluntary, opt-in program for both customers and suppliers."

Dominion would provide customer education concerning the optional carbon-free products, including providing an active supplier list and contacts, and would include a Decarbon Ohio Program logo on participating customers' utility consolidated bills

The Program would be available to Choice-eligible residential and nonresidential customers taking service under the following rate schedules: (1) Energy Choice Transportation Service – Residential and (2) Energy Choice Transportation Service – Nonresidential

The stipulation does not disturb the following retail supplier eligibility requirements proposed by DEO for participation in the Decarbon Ohio Program

a. The supplier must have been providing Energy Choice service for at least 12 months.
b. The supplier must either (i) have at least 100 non-MRR, non-SSO, and non- SCO Energy Choice Customers under contract for competitive retail natural gas service or (ii) be serving at least 10,000 Mcf of non-MRR, non-SSO, and non-SCO Energy Choice annual load.

DEO will work to create websites and other information enabling customers to identify and pursue enrollment with a Program supplier

The stipulation provides that, regarding the development of DEO's websites and other information, such websites and informational materials may generally describe the Program and associated terms and conditions and may list participating suppliers in a competitively neutral manner.

In addition, any supplier offering a rate through the Program shall identify the rate as a qualifying Program rate offer in the “Offer Details” on the Commission's DEO Apples-to-Apples Chart. If the Apples-to-Apples Chart for the DEO service territory is modified to include a new column or other icon or indicator on the face of the Chart that indicates whether a supplier offer is a qualifying Program rate offer, DEO may remove the list of suppliers from any DEO website if requested by Staff

DEO agrees to grant to suppliers who opt to participate in the Program a nonexclusive right and license to use the Decarbon Ohio trademark without cost to the supplier solely in connection with the promotion of rate offers that qualify for the Program, subject to mutually agreeable trademark terms in the supplier agreement governing the program.

DEO will verify suppliers' compliance with offsetting the required amounts of carbon, and the Verification Process will generally follow the process initially proposed by DEO

However, the stipulation provides that carbon offsets acquired through the carbon registries maintained by the following entities shall constitute preapproved third-party verified carbon offsets: Verified Carbon Standard (VCS), the American Carbon Registry (ACR), the Climate Action Reserve (CAR), CSA CHG CleanProjects Registry and the Gold Standard (GS).

Regarding customer enrollment, Suppliers that opt to participate in the Program and meet all participation requirements as established between DEO and Supplier shall not be required to reenroll customers under existing rate offers that otherwise qualify for the Program but may, subject to compliance with Commission rules and DEO administrative requirements, transition such customers directly into the Program.

DEO will undertake various customer education, generally in the manner proposed in the initial application, and subject to certain provisions noted above (i.e. competitively neutral)

The stipulation provides that funding for customer education regarding the Program and all CRNGS commodity offerings including environmental or sustainability attributes may utilize a portion of funds from the $0.01/Mcf fee currently collected from suppliers approved in Case No. 18-1419-GA-EXM (the 18-1419 Funding)

However, nothing in the stipulation shall be construed as prohibiting DEO from developing customer education for the Program that is not funded by the 18-1419 Funding.

In developing such education and otherwise administering the Program, DEO shall comply with Section 4905.35(A) of the Ohio Revised Code, which provides that, "[n]o public utility shall make or give any undue or unreasonable preference or advantage to any person, firm, corporation, or locality, or subject any person, firm, corporation, or locality to any undue or unreasonable prejudice or disadvantage."

In its original application, DEO said that it believes that a going level of Program costs will be reflected in the rates to be established in DEO's next base rate proceeding

The stipulation revises cost recovery to be as follows for Program administrative costs

a. The Program's startup costs, including initial IT system costs, shall be borne by DEO, and not recovered from ratepayers or suppliers.
b. The Program's ongoing administrative and IT costs shall be recovered via a nondiscriminatory surcharge to suppliers participating in the Decarbon Ohio program. This surcharge shall be determined following approval of this Stipulation by DEO and suppliers who are Signatory Parties. The surcharge and related information shall be shared with Staff upon request. For each calendar year the Program is in operation, recoverable costs shall be limited to $100,000, as adjusted each year for inflation as reported by the U.S. Bureau of Labor Statistics Consumer Price Index.

The stipulation provides that a governmental aggregator's participation in the Program shall be subject to the same terms and conditions applicable to CRNGS [retail suppliers] participating in the Program. Originally, DEO had said that , it may be necessary to require additional protections and conditions on governmental aggregator participation.

Signatory parties to the stipulation are The East Ohio Gas Company d/b/a Dominion Energy Ohio (DEO or the Company); Interstate Gas Supply, LLC (IGS); SFE Energy Ohio, Inc. and StateWise Energy Ohio, LLC (SFE Energy); Direct Energy Business LLC, Direct Energy Services LLC, Direct Energy Business Marketing LLC, Energy Plus Natural Gas LLC, Reliant Energy Northeast LLC, Stream Ohio Gas & Electric, LLC, and XOOM Energy Ohio, LLC (the NRG Retail Companies); and the Retail Energy Supply Association (RESA)

Case No. 22-0179-GA-ATA et al.

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