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PUC Adopts Rule Requiring Retail Suppliers To Reimburse Utility For Incremental Costs Incurred To Correct Improper Switches, Including Early Termination Fees
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The PUC of Ohio has adopted final revisions to the natural gas utility customer service rules which now grant the utilities with authority to seek the recovery, from retail suppliers, of incremental costs associated with correcting an improper initiation of a switch
As discussed further below, PUCO did slightly modify the language authorizing utilities to seek reimbursement from retail suppliers, in order to make clear that PUCO Staff is the entity which determines fault for an unauthorized switch, but PUCO generally denied concerns raised by retail suppliers regarding the provision
Utilities will be granted the authority to seek reimbursement from retail suppliers for costs related to unauthorized switches upon a PUCO Staff determination that an unauthorized switch occurred and that the retail supplier was at fault
Specifically, PUCO's approved rule language provides that, "If the [PUCO] staff determines that a customer's regulated sales service or competitive retail
natural gas service was switched without the customer's authorization, and that gas or natural gas company is not at fault, the gas or natural gas company may then
seek reimbursement from the retail natural gas supplier or governmental aggregator
that improperly initiated the switch by providing an itemized list of any incremental costs incurred by the gas or natural gas company to correct the
unauthorized switch, including any switching fees."
Discussing the costs for which a utility may seek reimbursement from a retail supplier, PUCO said that "incremental fees" as used in the rule, "refers to all fees that occur from the unauthorized switching[.]"
"[T]hese fees, detailed in
an itemized list, are recoverable from the party at fault pursuant to [PUCO] Staff’s determinations," PUCO said
PUCO agreed with the Ohio Consumers' Counsel that the customer who had their service switched without consent
or authorization, "will not be responsible for any incurred costs."
In light of such broad finding that customers shall not incur any costs from an unauthorized switch, PUCO said that specifically listing, in the rule, early termination fees as a cost for which the utility may seek reimbursement from a retail supplier would be, "redundant and unnecessary."
"[T]he objective is to make the customer of slamming
whole again as a minimum requirement of natural gas or gas utilities’ processing of
slamming complaints," PUCO said
PUCO also declined to mandate that utilities must seek to recover from retail suppliers any costs related to an unauthorized switch, with PUCO instead making the utilities' authority permissive
PUCO acknowledged the, "reality of these automated
systems," used for switching, and agreed that there may be instances in which the reimbursement of incremental costs is unwarranted, but the ultimate discretion to seek such recovery belongs to the utility
Retail suppliers had expressed concern with the proposed reimbursement authority granted to the utilities, especially for instances of inadvertent or good faith mistakes (transposed account number, etc). Retail suppliers also raised due process concerns
In response, PUCO said that Staff would decide fault based on evidence provided by
the utility and the retail supplier
PUCO said, "Staff’s practice allows
retail natural gas suppliers the opportunity to present evidence to the contrary if they object
to a gas or natural gas utility’s claims."
"Accordingly, we find RESA’s arguments that the rule
affords gas or natural gas utilities too much discretion in determining their own fault to be
unfounded; the process is permissive in nature, specifically places Staff in the fault-finding
position, and offers utilities, suppliers, and aggregators the opportunity to submit proof of
consent or other relevant evidence," PUCO said
PUCO revised the rule language slightly to make clear that it is PUCO Staff who determines fault for an unauthorized switch [the earlier draft language could have been read Staff determining that a slam occurred, but with the earlier draft being ambiguous as to Staff being the arbiter of which entity is at fault for the slam]
The rule also addresses situations in which the utility is found at fault for an unauthorized switch.
In such case where the utility is at fault, the utility, among other things, shall reimburse the retail natural gas supplier or the governmental aggregator for any
incremental costs incurred by the supplier or aggregator to correct the unauthorized switch.
In cases where the utility is at fault, the rule includes provisions in which the utility shall provide payments or credits to the customer to make the customer whole, including in cases in which the customer cannot be returned to their retail supplier at the prior rate. "If the customer cannot be returned to the original contract terms with its previous
provider, the slamming utility shall credit or refund to the customer the value of
the customer's contract with the previous provider by the next billing cycle and
for the remaining term of the contract immediately prior to the slam," the rule states
The final rule also changes the due date for customer bills issued by utilities to be 21 days, from the current 14 days (or 17 days if the bill is issued from outside Ohio)
The Retail Energy Supply Association had requested that, if this extended customer due date was adopted, PUCO should prohibit the utilities from also extending their payment dates to retail suppliers under utility consolidated billing with purchase of receivables
PUCO denied this request from RESA, stating, "it would be unreasonable and incongruous
with the intent of the change to include language that requires gas utilities to pay CRNGS [retail]
suppliers before receiving payment from customers as RESA has suggested."
Utilities, PUCO said, "should be allowed to revisit payment requirements in [their] Energy Choice
Program or similar agreements to align with the law."
While PUCO has adopted final rule language, the rules, under the customary process, remain subject to review by the Joint Committee on Agency Rule Review. An effective date for the revised rules would be established after JCARR review, though PUCO would establish the effective date to be the "earliest date permitted" by law.
Case 25-177-GA-ORD, 25-0177-GA-ORD
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PUC Extends Payment Period For Customer Billing, Declines To Prohibit Utilities From Extending Payment Period Under Purchase Of Receivables In Light Of Extended Customer Bill Due Date
May 27, 2026
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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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