Ohio Consumers' Counsel: Choice Customers Have Paid Nearly $1 Billion More Than Default Service Rates Since 1997

Customers on choice service at Columbia Gas of Ohio have paid nearly $1 billion more than rates for the applicable default service since 1997, the Ohio Consumers' Counsel said in comments opposing a non-unanimous stipulation which would set milestones for Columbia's exit from the merchant function.

As first reported by Matters, the non-unanimous stipulation would require Columbia to file an application before PUCO to exit from the merchant function, and end the Standard Choice Offer (SCO) for choice-eligible customers, if certain thresholds for customer migration to choice are met.

See prior story for details on the proposed merchant function exit

OCC presented an analysis of choice customer costs versus shadow-billed default service costs [under the then-applicable gas cost recovery factor (GCR), Standard Service Offer (SSO) or Standard Choice Offer (SCO)] at Columbia Gas provided by Columbia in response to an interrogatory.

From April 1997 to date, OCC said that the shadow billing data, "shows that Columbia's customers have cumulatively paid $865 million more for the Choice Program than they would have paid had they taken service under the alternative GCR, SSO or SCO rate."

"A closer review of Columbia's Shadow Bill data also indicates that on a monthly basis customers have lost money -- or paid higher Choice Program rates than the alternative GCR, SSO or SCO rate in every month from August 2004 to present, except for four months. Even more concerning is the fact that most of the savings achieved by customers participating in the Choice Program occurred in the early years (1997-2001), with cumulative savings peaking in July 2001," OCC said.

"So having the SCO is a 'benefit' for customers. It's a benefit that has saved customers a lot of money," OCC said.

Moreover, OCC said that, "[t]he SCO is generally the lowest price option for consumers."

"Indeed, the PUCO's own Apples-to-Apples chart has shown that the Columbia SCO rate is in most instances the lowest publicly advertised variable rate available to customers," OCC said.

"The fact that the Settlement is written to move customers away from the money-saving SCO means that the settlement fails to benefit customers and is not in the public interest. Because the SCO is generally the lowest price option for consumers, the PUCO should not authorize a framework that could result in its termination," OCC said.

Case No. 12-2637-GA-EXM