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PUC Approves Delay In Transition To Wholesale Auction For Default Service

January 22, 2025

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

The following story is brought free of charge to readers by VertexOne, the exclusive EDI provider of EnergyChoiceMatters.com

The PUC of Ohio approved what it termed a "delay" in the implementation of a wholesale Standard Service Offer (SSO) auction to procure supply for default natural gas service at Duke Energy Ohio, with the initial SSO auction ordered to be held in early 2026, for service starting April 1, 2026

As previously reported, PUCO on December 4, 2024 adopted a stipulation establishing the use of an SSO auction at Duke Energy Ohio, replacing the current gas cost recovery (GCR) process for non-shopping gas customers

Under the SSO, in an annual auction, suppliers will bid to serve, at wholesale, tranches of Duke's non-shopping load under the SSO. SSO Suppliers will bid a retail price adjustment (RPA) at which to serve customers in addition to the applicable NYMEX price. SSO Suppliers will not supply individual customers. See more details here

PUCO agreed with Duke that, given the December 2024 approval date for the new SSO auction process, there was not sufficient time to properly conduct the initial auction in early 2025 for an April 1, 2025 start date

PUCO also approved, as proposed by Duke and supported by retail suppliers, modified dates for various tariff changes, in light of the December 2024 approval date for the SSO auction

As previously reported, PUCO in the SSO order adopted a change in how balancing fees are charged to customers, with this change specifically intended to be effective April 1, 2025

Specifically, PUCO adopted a stipulation whose stipulated tariff required that, effective April 1, 2025, 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)

While providing for an April 1, 2025 effective date for the change in how balancing fees are collected, the stipulation had also provided for the existence of a transition period during which time retail suppliers would remove balancing fees from their retail rates, given that the fees would, going forward, be directly charged by Duke to all customers. The time period for this transition was not explicitly defined in the stipulation, but, had an anticipated April 1, 2024 start for SSO service been adopted, the transition period (in terms of notice to the market) would have been at least 12 months in length.

In light of the stipulation's expectation that there would be a transition period for Duke to assume the collection of balancing charges from all customers, with such fees removed from retail supplier rates, Duke proposed, and PUCO has now approved, that this change in balancing charge collection will now be effective June 1, 2025, rather than April 1, 2025

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

PUCO approved maintaining the current FBS and EFBS rates as part of approving Duke's proposed tariffs, with Duke stating that it will not change FBS and EFBS between now and the June 1, 2025 effective date for the change in how balancing costs are collected

Retail suppliers had emphasized the need to maintain the current FBS and EFBS rates, until June 1, 2025 (at which time FBS and EFBS will no longer be charged to retail suppliers), because, due to a wholesale pipeline rate case, an increase in FBS and EFBS implemented coincident with retail suppliers' removal of balancing charges from their retail prices, as part of the balancing cost transition, could leave retail suppliers with unrecovered costs

Case 21-903-GA-EXM

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