Pa. PUC ALJs Say Utility Allowed To, "Afford Itself A Preference Or Advantage In The Provision Of Billing Services"

ALJs Would Approve Utility's Proposed Natural Gas Carbon Offset Product

ALJs: Statute Does Not Give Suppliers Exclusivity Over Non-basic Products & Services Or Prohibit Provision By Utilities

April 19, 2023

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Reporting by Paul Ring • ring@energychoicematters.com

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Two Pennsylvania PUCs ALJs have issued a recommended decision which would approve, as modified by a previously reported non-unanimous stipulation, Columbia Gas of Pennsylvania's proposal to offer customers a voluntary carbon offset product on a pilot basis

See background on the proposal and -unanimous stipulation here

Under Columbia's proposed Green Path Rider, Columbia would purchase renewable natural gas (RNG) environmental attributes and carbon offsets to match the customer’s election of either a 50% or 100% reduction in their emissions, and the customer will be charged an additional fee per therm that reflects the cost of the RNG environmental attributes and carbon offsets purchased by Columbia on behalf of the customer.

The Retail Energy Supply Association, Shipley Choice, LLC and NRG Energy, Inc. were among parties opposed to the settlement

The ALJs would reject various concerns raised by the retail supplier parties. Retail suppliers had argued that Columbia's proposal is discriminatory since retail suppliers are not permitted to bill such offsets via utility consolidated billing. Retail suppliers had also argued that the Columbia Green Path Rider is a competitive product and should be subject to the utility Standards of Conduct

The ALJs concluded that, "the Commission allows a utility to afford itself a preference or advantage in the provision of billing services."

The ALJs cited Interstate Gas Supply, Inc. et al. v. Metro. Edison Co., Pa. Elec. Co., Pa. Power Co. and West Penn Power Co., Docket Nos. C-2019-3013805, et al. for this conclusion

See background on the Interstate Gas Supply case here

In brief, and as previously reported, in Interstate Gas Supply, the PUC had concluded that, "We read nothing in the language of Section 1502 or the decision in Columbia [a prior Columbia case concerning non-utility service billing by a utility-selected partner] to require a utility to provide to a third party the identical services the utility itself provides."

"Rather, as applied in Columbia, Section 1502 requires that where a utility provides utility service to another, the same service must be provided in a nondiscriminatory, or not unreasonably discriminatory manner to other parties," the PUC had said in Interstate Gas Supply

In short, the ALJs concluded that since Columbia would offer the Green Path Rider (GPR) itself, and not via a third-party which would have been granted exclusive bill access, there is no discrimination which runs afoul of statute or regulation

The ALJs said, "The RESA/NGS Parties argue Columbia’s proposal to recover the GPR as a non-commodity charge on the consolidated bill puts suppliers at a severe competitive disadvantage ... We do not find any evidence that the manner in which Columbia proposes to bill for the GPR violates the law."

The ALJs said, "NGDCs [natural gas distribution companies] may include charges for non-basic products and services as a separate line item on the utility bill so long as they do so in a non-discriminatory manner."

"Although the RESA/NGS Parties criticize Columbia’s proposal because NGSs [natural gas suppliers] cannot include charges for non-basic services provided by NGSs on a consolidated utility bill, the Commission recently held [in Interstate Gas Supply] that a utility is not prohibited from affording itself a preference or advantage in the provision of billing services," the ALJs said

The RESA/NGS Parties asserted that Columbia’s proposal is subject to, and violates, the Standards of Conduct found at 52 Pa. Code §§ 62.141-142 (Standards of Conduct), which requires the separation of personnel and expenses as between jurisdictional and competitive services

The RESA/NGS Parties argued that the Standards of Conduct apply because the GPR is a product "related to" natural gas supply services to compete with products already in the market

The ALJs said that the Standards of Conduct do not define "natural gas supply services," but noted that Chapter 22 of the Public Utility Code (Chapter 22), which led to the creation of the Standards of Conduct, defines "natural gas supply services" as follows:

(1) The term includes:

(i) the sale or arrangement of the sale of natural gas to retail gas customers; and

(ii) services that may be unbundled by the commission under section 2203(3) (relating to standards for restructuring of natural gas utility industry).

(2) The term does not include distribution service.

Citing this definition, the ALJs said, "We do not agree that the Standards of Conduct apply to Columbia’s proposal."

"[T]he GPR does not sell RNG [renewable natural gas], but RNG attributes and carbon offsets. Therefore, we see no basis to characterize the GPR as offering 'natural gas supply services,' which includes the sale of natural gas to retail gas customers," the ALJs said

The ALJs said, "We ... agree with Columbia’s argument that Chapter 22 does not give suppliers exclusivity over non-basic products and services or prohibit NGDCs from offering non-basic products and services simply because natural gas suppliers offer the same or similar products and services."

"Even if the GPR was considered a 'natural gas supply service,' we are not persuaded that the Standards of Conduct apply to Columbia in this instance. Specifically, Columbia is offering the GPR, and therefore it is not clear how Columbia could therefore be considered an NGS under the Standards of Conduct offering the GPR. Although the Standards of Conduct define an NGS as including 'an NGDC marketing affiliate without regard to structural relationship' we are not convinced that Columbia qualifies as an NGDC marketing affiliate and is therefore an NGS," the ALJs said

The ALJs would approve without modification the Joint Petition for Non-Unanimous Settlement, filed on March 22, 2023, by Columbia Gas of Pennsylvania, Inc., the PUC's Bureau of Investigation and Enforcement

R-2022-3032167 et. al.

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