PUC Rehearing Order Addresses Bypassable Retail Adder, Customers' Ability To Opt-Out of Utility PJM Charges (Assigned To Retail Supplier)

As part of an eighth entry on rehearing concerning the FirstEnergy Ohio EDCs' current electric security plan, the Public Utilities Commission of Ohio again addressed a proposed retail adder, Retail Competition Enhancement Rider (Rider RCE), which would have acted as a proxy for unbundling but which did not require actual unbundling of distribution rates.

As previously reported, PUCO's original order called for the FirstEnergy EDCs to propose unbundling of any costs to support the administration of the Standard Service Offer. This direction departed from an agreement between IGS Energy (which had originally proposed unbundling) and the FirstEnergy EDCs', who had agreed that in lieu of full unbundling, a bypassable retail adder, as a proxy for SSO support costs, would be implemented.

In an earlier rehearing order, PUCO reversed its direction for the proposed unbundling, but also denied implementation of the proxy retail adder under Rider RCE (see story here)

IGS sought rehearing of this reversal, but PUCO declined to grant IGS's sought relief

"The Commission will affirm our decision that the limited testimony of FirstEnergy witness Mikkelsen, solicited on cross-examination, is insufficient to persuade the Commission to establish Rider RCE," PUCO said in its latest order

"The record includes no information on whether it is necessary to incent shopping by the potentially affected customers in the Companies' service territories. In fact, the record demonstrates that, at the hearing, FirstEnergy did not endorse the establishment of Rider RCE," PUCO said

PUCO also addressed a "pilot" program allowing large customers to opt-out of nonbypassable treatment of various non-market-based PJM charges, with such charges instead assigned to, and collected by, the customer's load-serving entity, rather than the distribution company.

Originally, under a stipulation, certain signatories were to be eligible for a "small-scale pilot program" providing an alternative means for customers to obtain and pay for services otherwise provided by or through the Non-Market -Based Services Rider (Rider NMB)

Such customers could opt out of the utilities' Rider NMB and obtain, directly or indirectly through a retail supplier, all transmission and ancillary services through the Open Access Transmission Tariff and other PJM governing documents

In its order on the ESP, PUCO ruled that any customers may seek to take advantage of the Rider NMB opt-out by applying at PUCO for a "reasonable arrangement" under R.C 4905.31

The EDCs sought rehearing regarding this expansion, and, at a minimum, asked PUCO to clarify how opt-out applications would be processed and determined to be in the public interest per R.C 4905.31

PUCO denied rehearing concerning the expansion of the opt-out pilot.

"The Commission has broad authority under R.C 4905.31 to approve reasonable arrangements between electric distribution utilities and mercantile customers, and we simply acknowledged that broad authority in stating that a mercantile customer may join the pilot program through an application under R.C 4905.31. We reject any implication that such applications would somehow limit the Commission's ability to determine the proper size of the pilot program or whether the participation of any given customer is in the public interest," PUCO said