IGS Energy Seeks Retail Gas Market Enhancements as Condition of Constellation-Exelon Merger

Interstate Gas Supply asked the Maryland PSC to condition the merger of Constellation Energy and Exelon on improvements to the design and operation of the retail gas market at Baltimore Gas & Electric.

In testimony filed Friday, Interstate Gas Supply sought that BGE, among other things:

- Allocate assets, including upstream pipeline capacity and storage, on a pro-rata basis

- Improve its billing system to offer EDI for gas choice data (see related story today)

- Provide billing services for non-commodity products and services on a non-discriminatory basis

- Offer budget billing that includes both gas commodity charges and distribution charges to gas choice customers using a rate ready billing model

Regarding the allocation of pipeline capacity, BGE has not been required to provide pipeline firm transportation capacity assignment since 2004, and has not done so since, with BGE stating that it has received no requests for such capacity.

Interstate Gas Supply testified that these assets should be allocated on an equal, pro-rata, non-discriminatory basis given the inclusion of assets in base rates.

Additionally, BGE does not assign or release storage and peak shaving capacity to suppliers. BGE does offer a behind-the-gate gas banking program that acts like storage, for a charge.

However, IGS Energy said that, "[b]ecause the cost of the assets that BGE uses to provide the banking service are assets that were already included in base rates which are paid by all BGE customers this results in a redundant payment for the same asset."

"Until the crucial terms and conditions relating to the use of pipeline capacity and storage assets are made equal for sales and choice customers, there will remain an economic disadvantage to customers that select gas suppliers other than BGE," IGS said.

IGS Energy further said that working capital for gas costs should be removed from base rates and included in the gas supply cost.

Regarding billing, IGS Energy reported that it has a warranty product, and claimed that, "IGS requested that BGE provide billing services for the product, but BGE has refused to do so."

However, this testimony cited an April email from BGE indicating that it was still investigating the capability to add an additional line item on its bill for non-energy charges under its new billing system. It was not clear if the billing of non-commodity services could be effectuated through a means other than the sought line item (e.g. lumped into commodity bill ready billing).

With respect to budget billing, IGS said that BGE's ability to only accommodate budget billing for commodity supply charges through bill ready billing, "discriminates against suppliers who are only capable of performing under a rate ready model." IGS sought to require BGE to modify its billing system capabilities so that its rate ready system can manage budget bill payments for both distribution charges and supply charges of choice customers.