Ohio Allows Accelerated Drop of Customers from Defaulting Supplier to SSO to Resolve AEP Ohio-FirstEnergy Solutions Credit Dispute

The Public Utilities Commission of Ohio has granted AEP Ohio certain waivers to allow the accelerated return of customers from a defaulting supplier back to SSO to resolve a credit dispute between AEP Ohio and FirstEnergy Solutions, with the accelerated drop timeline obviating the need for further credit from FES.

As first reported by Matters, AEP Ohio was seeking additional collateral from FES after FES passed a limit on unsecured credit. FES opposed the request, arguing that AEP Ohio's credit policies were unjust and unreasonable.

While AEP Ohio's primarily sought relief was the suspension of FES' supplier coordination agreement, it also proposed alternative relief that would obviate the need for further credit and therefore resolve the dispute.

Specifically, AEP Ohio said that if the Commission granted a waiver of the current 12-day deadline (prior to the next meter read) for the submission of switches back to SSO service, which applies even in cases of retail supplier default, then the need for additional collateral would be obviated. AEP Ohio proposed that customers of a defaulting supplier be switched back to SSO within 15 days, regardless of whether this time period fits the 12-day enrollment window, in order to reduce exposure prompting the need for collateral.

AEP Ohio noted that the current rules contemplate that customers are permitted an opportunity to switch away from their defaulting supplier to a new supplier without any return to SSO. Under the waiver and 15-day drop period, however, all customers of the defaulting supplier would be returned to SSO service for at least an interim period.

"These customers can select a new CRES Provider anytime thereafter, potentially as soon as the start of the next billing cycle following the end of the 15-day period, and the minimum stay requirement would not apply," AEP Ohio said.

AEP Ohio asked that the waiver apply to all retail suppliers, such that they would all, on a non-discriminatory basis, receive the benefit of any reduced collateral need implicated by the waiver.

The Commission approved AEP Ohio's alternative request for a limited waiver of the customer switching provisions contained in Section 31, Subsection 4 of its supplier tariff, therefore resolving the dispute without the need for FES to post additional collateral.

PUCO further noted:

"Although the Commission today approves AEP Ohio's request for alternative relief, we also note that AEP Ohio's supplier tariff is currently pending Commission review. On March 22, 2013, AEP Ohio filed an application in In the Matter of the Application of Ohio Power Company to Amend Its Supplier Coordination Tariff and Related Contracts, Case No. 13-729-EL-ATA (13-729), seeking approval of changes to its electric generation supplier tariff and its CRES provider agreement. By entry issued on June 5, 2013, the attorney examiner established a comment period in 13-729, with initial and reply comments due on July 8, 2013, and July 22, 2013, respectively. The Commission encourages all interested persons to file comments addressing the issues raised in AEP Ohio's application in 13-729, including AEP Ohio's proposed credit requirements for CRES providers."

Case No. 13-1427-EL-UNC