Maryland Staff Propose Extended Transition for End of Columbia Choice Program

Maryland PSC Staff have recommended that the Columbia Gas choice program be terminated with the October 2012 billing cycle.

Staff had originally agreed with Columbia's proposal for an April 2012 end to the choice program; however, Staff's new recommendation reflects the PSC's concern with existing choice contracts, and desire to accommodate the roll-off of such contracts without incurring great costs (see prior story).

Columbia had previously informed the Commission and Staff that the costs, recovered in base rates, of keeping the customer choice program active are on average approximately $17,000 per month. In its supplemental data response to Staff, Columbia estimates that the base costs start at $11,638, but that these costs can easily double to approximately $23,276 per month, depending on the level of activity in the customer choice program. "However, Staff notes that the Company was not able to provide any further breakdown of costs to maintain the Choice program in the interregnum, which began when the Company ceased accepting new customers into its Choice program beginning with the Commission's Letter Order dated January 5, 2012, until the Choice program is formally terminated," Staff reported.

Staff said that termination coincident with the October 2012 billing cycle would obviate unnecessary disputes among the parties, and allow a more orderly termination of the gas choice program.

"As part of this proposal, the Company would be required to begin amortizing the costs related to its COMAR 20.59 implementation beginning with the July 2012 billing cycle, but continue operating the Choice program until the October 2012 billing cycle. Under this approach, the one remaining supplier, WGES, would be allowed additional time (three months [versus an alternative proposal]) to unwind its existing contracts. The Company would absorb any incremental costs associated with maintaining the Choice program until the October 2012 billing cycle, with the caveat that no new customers would be accepted into Choice."

Under Staff's recommendation, Columbia would file its next base rate case on or about March 1, 2013, removing the costs associated with its choice program when those new rates go into effect.

Alternative, Staff said that a termination of the choice program at the end of June 2012 would equilibrate the costs to ratepayers encumbered in Columbia's base rates and the costs to WGES of terminating its contractual agreements at that time. While Staff therefore alternatively proposes termination with the July 2012 billing cycle, it is not Staff's recommendation.