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Retail Suppliers Emphasize Need For Implementation Of Change in How Balancing Charges Are Treated, Given Pipeline Rate Hike

January 13, 2025

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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The Retail Energy Supply Association and Interstate Gas Supply urged the PUC of Ohio to expeditiously approve Duke Energy Ohio's modified timeline to implement natural gas balancing charge changes, with the changes now proposed to take effect on June 1, 2025

As previously reported, PUCO, as part of approving the transition to a natural gas SSO auction at Duke, recently adopted a change in how balancing fees are charged to customers, with an approved stipulation originally providing that this change would be effective April 1, 2025

Under the change, Duke shall cease charging balancing fees to retail suppliers, with Duke instead billing balancing fees directly to all customers on a nonbypassable basis, without markup

Balancing fees are currently included in retail suppliers' prices (to the extent the supplier chooses to recover balancing fees from customers)

Duke sought to briefly delay the transition in how balancing charges are collected, to June 1, 2025, to allow retail suppliers to remove such costs from their rates, as contemplated by the adopted stipulation.

Associated with this proposed June 1, 2025 effective date for the balancing charge change, Duke proposed to maintain the current rates under Rider FBS (Firm Balancing Service) and Rider EFBS (Enhanced Firm Balancing Service), unchanged, through June 1, 2025

RESA & IGS support a June 1, 2025 date for the balancing cost change, and stressed that further delay, or raising rates under FBS and EFBS in the interim, could expose retail suppliers to unrecovered costs

RESA & IGS noted that Columbia Gas Transmission is seeking a rate increase at FERC, and said that Columbia is expected implement its sought higher rates, subject to refund, during the FERC rate case

But-for the Duke balancing tariff changes approved by PUCO in the SSO order, the Columbia costs would otherwise flow to retail suppliers via FBS and EFBS, with suppliers paying for balancing, rather than Duke assigning the balancing costs to all delivery customers

However, retail suppliers are now required to remove balancing costs, such as those from Columbia, from their retail rates under PUCO's SSO transition order.

Thus, if the FBS and EFBS rates are increased, due to Columbia's rate increase, prior to Duke assuming the obligation for all balancing costs, retail suppliers will be unable to recover the balancing costs assigned to them

Regarding the SSO auction, RESA and IGS said that they are "amendable" to moving the initial SSO auction to February 2026, with SSO service starting on April 1, 2026, as now proposed by Duke, as Duke said that there was not enough time for an April 1, 2025 start date due to PUCO only issuing the SSO approval order in December 2024

Case 21-903-GA-EXM

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