Revised Settlement Removes Trigger for Columbia to File for Residential Merchant Function Exit

A revised settlement filed with the Public Utilities Commission of Ohio, now supported in part by the Ohio Consumers' Counsel, would remove an originally proposed trigger that would have required Columbia Gas to file an application at PUCO to exit the merchant function.

As first reported by Matters, Columbia, Commission Staff, the Ohio Gas Marketers Group, Retail Energy Supply Association, and Dominion Retail, Inc. had originally filed a non-unanimous stipulation which would have removed Columbia from the merchant function, and provision of default service, for non-residential customers if certain migration thresholds are met, and would have triggered an application before PUCO for Columbia to exit the merchant function for residential customers (subject to further PUCO approval) if certain migration thresholds are met.

The OCC had opposed the original stipulation due to its residential provisions, but with several revisions, now joins the stipulation in part, and agrees not to litigate other issues.

Most notably, in deference to OCC, the revised stipulation does not automatically trigger an application before PUCO for Columbia to exit the merchant function for residential customers if residential migration away from the Standard Choice Offer (SCO) has met or exceeded 70% of the Choice-Eligible residential customers for three consecutive months. Instead, Columbia may file, but would not be required to file, an application for an exit from the residential merchant function if such a migration threshold is met.

Under the revised settlement, Columbia shall not file a residential merchant function exit application with the Commission unless and until the customer participation level in the Choice program has met or exceeded 70% of the Choice-Eligible Residential Customers for three consecutive months

Additionally, Columbia shall not file a residential merchant function exit application until (1) at least one month after the third consecutive month of at least 70% customer migration by Choice-Eligible Residential Customers, and (2) at least twenty-two months after Columbia exits the merchant function with regard to Non-Residential Customers.

If PUCO approves any application for Columbia to exit the merchant function for residential customers, Columbia will exit the merchant function with regard to residential customers effective the first April 1 that is at least five months after the issuance of the order approving the application.

Furthermore, through March 31, 2018, only Columbia may make a filing at the Commission to seek an exit from the merchant function for residential customers, the stipulation provides.

The revised settlement would not modify the earlier stipulation's provisions regarding a merchant function exit for non-residential customizes -- such exit shall occur, without requiring any further PUCO approval, if, during an annual review on June 1 of the prior 12 months of migration, non-residential customer migration away from the SCO met or exceeded 70% of the Choice-Eligible non-residential customers for three consecutive months. The exit would take effect on the following April 1.

The revised settlement provides that Columbia shall continue its full residential and non-residential Choice Program Shadow Billing through March 31, 2018 and shall make such shadow-billing information available to OCC upon request.

If Columbia exits the merchant function with regard to Non-Residential Customers, Columbia's Choice Program Shadow Bill for Non-Residential Customers after that exit shall compare the Non-Residential Choice customers' monthly billed gas costs to the residential monthly SCO auction price.

OCC is no longer litigating the newly proposed SCO Supplier Security Requirements, which have been reduced in the revised stipulation. Originally, in addition to the Letter of Credit, SCO Suppliers were proposed to be required to provide Columbia with a cash deposit in the amount of 10¢/Mcf multiplied by the initial estimated annual delivery requirements for the SCO Program Year of the tranches won by that SCO Supplier.

Under the revised settlement, the SCO Supplier security deposit fee will be 6¢/Mcf.

Additionally, the settlement now includes language providing that after April 1, 2013, no Choice Supplier may charge retail Choice customers a rate that is designed or intended to provide compensation for the Balancing Fee that Columbia charged suppliers prior to April 1, 2013, so as to avoid charging any customers twice for the same service. As previously reported, the settlement modifies the Balancing Fee such that it will now be charged directly to customers instead of being charged to suppliers.

Other terms of the stipulation, such as the Monthly Variable Rate provisions for any merchant function exit, have not been substantively modified, see prior story for details on these other provisions

Case No. 12-2637-GA-EXM