Ohio Chooses Method for Allocation of Non-Shopping Customers at Columbia in Any Merchant Function Exit

The Public Utilities Commission of Ohio adopted a stipulation which provides triggers for Columbia Gas' automatic exit from the merchant function for non-residential customers, and adopted mechanisms to allocate any non-shopping customers at that time, and any future non-shopping customers.

PUCO adopted a stipulation first reported by Matters.

Specifically, on June 1 of each year, Columbia will determine whether during the prior 12 months non-residential customer migration away from the Standard Choice Offer (SCO) met or exceeded 70% of the Choice-Eligible non-residential customers for three consecutive months.

If the consecutive three month 70% customer migration threshold has been met, then Columbia will exit the merchant function with regard to non-residential customers effective the first April 1 that follows. No additional application before PUCO will be required.

Those Choice-Eligible customers that do not enroll with a supplier will be assigned to a supplier, pursuant to Columbia's Monthly Variable Rate (MVR) Program. Customers assigned to an MVR supplier shall be free to leave the MVR supplier without a termination fee.

While a non-unanimous stipulation addressed the trigger for the merchant function exit, parties had not agreed on a method to assign any customers remaining on the SCO to MVR suppliers at the time of the merchant function exit.

PUCO adopted two approaches -- one for the initial allocation, and another for any ongoing allocations

The initial allocation of non-shopping customers to suppliers electing to serve such customers under a Monthly Variable Rate (MVR) program will be as follows:

(1) The initial allocation will be done on a proportional basis, as compared to the MVR supplier's Choice enrollment at the time of allocation, including a supplier's average historical SSO and SCO tranche ownership for nonresidential customers.

(2) A supplier's average historical SSO and SCO tranche ownership for nonresidential customers shall be measured going forward from January 9, 2013.

(3) For the initial allocation, a minimum of one percent shall be assigned to an MVR supplier with equal to, or less than, one percent Choice enrollment.

For ongoing allocations of customers newly without a supplier (including new service initiation customers not making an affirmative choice), the ongoing allocations shall be done on a random, rotating basis, based upon the list of participating MVR suppliers, PUCO said.

The MVR price shall be no greater than the supplier's MVR price posted on the Commission's Apples to Apples chart for the same billing period.

PUCO's order also adopted certain provisions related to any potential merchant function exit for residential service.

As first reported by Matters, an original stipulation had provided triggers for a residential merchant function exit filing before PUCO, but such triggers were removed under a revised stipulation. Under the modified settlement adopted by PUCO, Columbia is permitted to file, but is not required to file, an application for an exit from the residential merchant function if 70% of the Choice-Eligible residential customers are served on choice service 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 22 months after Columbia exits the merchant function with regard to non-residential customers.

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.

Any application to exit the residential merchant function would require further PUCO approval.

PUCO's order also adopted a new Standard Choice Offer supplier security deposit fee of 6¢/Mcf. The fee has been said to increase headroom for choice suppliers by raising the price bid for SCO service.

PUCO has ordered Columbia to conduct educational outreach to nonresidential customers to ensure all Choice-Eligible customers are equipped with information to help them make an informed decision when selecting a supplier to serve their natural gas needs.

Case 12-2637-GA-EXM