Ohio Approves Merchant Function Exit at Dominion East Ohio

The Public Utilities Commission of Ohio approved Dominion East Ohio's exit from the merchant function for non-residential customers, and adopted certain provisions relating to any potential merchant function exit for residential customers.

PUCO adopted a stipulation first reported by Matters in June.

Specifically, the adopted stipulation provides that, beginning April 1, 2013, the availability of Standard Choice Offer (SCO) service to Choice-eligible General Sales Service-Non-Residential, Large Volume General Sales Service, Energy Choice Transportation Service-Non-Residential and Large Volume Energy Choice Transportation Service customers will be discontinued.

In lieu of the SCO, a non-residential customer not making an affirmative election will be assigned to the next available competitive supplier on a rotating list of competitive suppliers registered to provide default service maintained by Dominion East Ohio, to be served at that supplier's Monthly Variable Rate, subject to the current limitations on the Monthly Variable Rate contained in Dominion East Ohio's tariff.

Most notably, a supplier's Monthly Variable Rate charged to customers assigned to a supplier from Dominion East Ohio shall not exceed any of the supplier's monthly variable rates posted on PUCO's Apples to Apples chart.

A customer randomly assigned to a supplier will always maintain the option of switching to a different supplier, entering into a different rate plan with the assigned supplier, or participating in an opt-out governmental aggregation program.

New non-residential customers establishing service at Dominion East Ohio for the first time, relocating within Dominion East Ohio's service territory and whose energy choice or governmental aggregation agreement is not portable, or restoring service more than ten days after being disconnected for nonpayment, will be placed on the Standard Service Offer (SSO) for at least one billing cycle. After that time, they may elect a competitive supplier or participate in an opt-out governmental aggregation program.

Such customers may be served under the SSO for up to two billing cycles, but afterwards, absent an affirmative election, would be assigned to the next competitive supplier on the Dominion East Ohio rotating list, to be served at the supplier's monthly variable rate.

SSO service will also remain available for non-residential customers not eligible for choice service (PIPP customers, etc.).

PUCO also reserved authority to revert to the SCO or other pricing mechanisms if warranted.

The SCO will remain available to residential customers, and consistent with the stipulation, parties agreed not to seek a full exit of Dominion East Ohio from the merchant function for residential customers until at least April 2015.

Dominion East Ohio also agreed that in the event it subsequently files a request for a full exit from the residential merchant function, it shall propose a transition that includes an additional one-year SSO/SCO auction that gives residential customers the option to receive SCO service for the year over which the auction results are approved.

The Ohio Consumers' Counsel reserved the right to challenge any application for a merchant function exit for residential customers.

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

PUCO's order also adopts various reporting requirements, applicable to DEO and suppliers, to judge the success of the merchant function exit in the non-residential market, and to help any future decision for a residential merchant function exit. Such metrics include the number of suppliers, records of supplier offers and services, an analysis of any increased investment in Ohio by suppliers that was caused by DEO's exit, and specific customer billing determinants.

The Commission also established that DEO shall conduct a comprehensive customer education program directed at all eligible non-residential customers to help them make fully-informed decisions about their natural gas supply.