No Consensus Reached on Continuation of Columbia Gas Choice Program

Retail suppliers and Columbia Gas of Maryland were not able to reach consensus on cost recovery issues which could lead to the elimination of the small volume choice program.

As only reported in Matters, Columbia Gas recommended ending the choice program after the PSC prohibited COMAR 20.59 implementation costs (relating to POR and other market enhancements) from being recovered from all distribution customers (3/30).

Given the low participation levels in Columbia's choice program, as well as its relatively small distribution customer base, Columbia does not believe any alternative which recovers the COMAR 20.59 costs through a POR discount or other charge on suppliers is viable, because it would be prohibitively expensive due to the small number of migrated customers over which to collect the cost.

The PSC had deferred consideration of Columbia's recommendation to permit more time for discussions among suppliers and Columbia 5/4.

Columbia said that all of the supplier proposals would recover costs from all distribution customers, which, aside from breaking PSC precedent, Columbia said would be "unfair" given that non-shopping customers at other distribution companies were not allocated any COMAR 20.59 expenses.

However, Washington Gas Energy Services noted that distribution customers in other service areas have borne COMAR 20.59 compliance costs in certain circumstances. By letter order of January 21, 2009 the PSC authorized Baltimore Gas & Electric to recover its estimated RM 35 (the proceeding in which COMAR 20.59 was developed) IT implementation costs for 2009 ($475,000) through the Gas Choice and Reliability Charge (GCRC) applicable to all distribution customers. While the PSC ordered BGE to cease using the charge for RM 35 costs in 2010, with costs recovered through the POR discount, WGES noted that a substantial portion of costs were already recovered from all distribution customers, making the POR discount rate for the remaining costs more reasonable.

Suppliers said that Columbia has offered no constructive alternatives to the supplier options presented.

Furthermore, the Maryland Energy Marketers Coalition note that Columbia's preferred option would still result in sunk implementation costs of approximately $200,000 being imposed on all distribution customers, even as the choice program is eliminated as customers therefore receive no benefits from these sunk costs.

The Commission will consider the Columbia choice program at its July 6 administrative meeting.