BP Energy Company Seeks Ohio Natural Gas Supplier License

BP Energy Company applied for an Ohio natural gas supplier license to serve all sizes of non-residential customers at Columbia Gas.

BP Energy said that its operations will not include the contracting of individual retail customers behind the Columbia system, and that its participation will be limited to the forthcoming Standard Choice Offer auction.

However, based on a review of Columbia's SCO program outline, it appears that there are not separate tranches for non-residential and residential customers, and thus, if BP is seeking to participate as an SCO supplier, it would need to include service to residential customers under its sought authority.

Indeed, BP Energy suggests that it does ultimately seek such authority (though the residential box is not checked) when it states, "with our primary focus on the [non-residential] customer segments listed above, we do not currently intend to market our services to residential customers outside of the SCO program" suggesting that BP will, as per the auction design, serve residential customers if it wins any SCO tranches (emphasis added).

Under the SCO auction design, bidders must be certified retail suppliers since the auction tranches represent actual retail customers, and not wholesale supply. BP Energy's decision to continue to participate in the SCO auction, and to seek a retail license in accordance with that decision, further erodes the Ohio Consumer Counsel's position that SCO auctions will be less competitive than the wholesale Standard Service Offer auction, under the OCC's argument that the requirement for a retail license to participate in the SCO auction will act as a barrier to participation by wholesale suppliers uninterested in becoming a retail supplier.

However, as previously reported (5/11), the experience at the Dominion East Ohio and Vectren SCO auctions does not bear this out, as those SCO auctions have seen the same level of participation, or higher participation, than the former (or concurrent) SSO auctions. Additionally, other wholesale SSO suppliers, such as DTE Energy Trading, previously sought and received a retail supplier license specifically in order to continue to participate in the SCO auctions, indicating that the retail license requirement has not been a barrier to participation.