PUC Staff Recommends Elimination Of Surcredit To Shopping Customers (Back-out Credit)

Recommends Change In Size Definition For Mercantile Customers?

Staff of the Public Utilities Commission of Ohio has filed a Staff report, containing recommendations and proposed changes, to a Duke Energy Ohio natural gas rate application (rate case)

In the report, Staff recommends eliminating Rider GSR, Gas Surcredit Rider, which provides a credit to shopping customers for costs related to the amount of the assessments for the Public Utilities Commission of Ohio and the Office of Consumers’ Counsel that is attributable to commodity sales service included in distribution rates (similar to a back-out credit or a shopping credit).

Duke's current tariff provides, under Rider GSR, that, "Amended Substitute House Bill No. 9 (HB9) requires the Company to remove from the Company’s base rates, the amount of the assessments for the Public Utilities Commission of Ohio and the Office of Consumers’ Counselor that is attributable to commodity sales service for those customers that do not purchase that service from the Company. This rider is applicable to all customers who receive their gas supply from a Competitive Retail Natural Gas Service (CRNGS) provider. This rider will remain in effect until such time as the Company establishes new base rates and this rider is recalculated."

Duke proposes to retain Rider GSR, though it would reduce the amount of the surcredit to shopping customers from $0.0012479 per 100 cubic feet to $0002953 per 100 cubic feet

Staff recommends eliminating Rider GSR and the surcredit to shopping customers

"Staff recommends eliminating Rider GSR. The PUCO and OCC assessments paid today by the Company are distribution expenses to be paid by all distribution customers whether the customers receive their gas supply from a Competitive Retail Natural Gas Service (CRNGS) provider or not," Staff said

Staff also proposes a change in Duke's tariffed definition of Mercantile Customer, but, despite possible scrivener's errors to the contrary, it appears Staff may just be seeking revised language (and units used) to express the current cutoff, rather than an actual change in the delineation point for mercantile vs. non-mercantile customers

At several points, the current Duke gas tariff states, "'Mercantile Customer' has the meaning set out in division (L) of section 4929.01 of the Ohio Revised Code. In summary, it means a customer that: (1) consumes, other than for residential use, more than 5,000 Ccf of natural gas per year at a single location or as part of an undertaking having more than 3 locations within or outside the state; and (2) that has not filed a declaration with the Commission."

Duke's summary description, which references the 5,000 Ccf cutoff, generally aligns with the cutoff set forth in R.C. 4929.01, though R.C. 4929.01 expresses the cutoff in terms of cubic feet (cf) [or read alternatively, thousands of cubic feet], not hundreds of cubic feet (Ccf)

R.C. 4929.01 division (L) states, "'Mercantile customer' means a customer that consumes, other than for residential use, more than five hundred thousand cubic feet of natural gas per year at a single location within this state or consumes natural gas, other than for residential use, as part of an undertaking having more than three locations within or outside of this state."

Five hundred thousand cubic feet (500,000 cf) of natural gas is essentially equal to 5,000 Ccf (or 500 Mcf)

However, Staff's report proposes as follows: "The Company’s definition of Mercantile Customer is a customer that consumers more than 5,000 CCF of natural gas per year, which differs from the definition provided by Section 4929.01 of the Ohio Revised Code. Staff recommends that the Company change its definition of Mercantile Customer from 5,000 to 500,000 CCF [sic] in order to conform with Ohio Revised Code Section 4929.01."

Using its plain language as filed, the Staff report appears to suggest that 4929.01 sets the cutoff as 500,000 CCF, not 500,000 cubic feet (cf) [which can also be expressed as 500 Mcf). To the extent Staff is seeking to align the tariff and Revised Code, we can only presume Staff is seeking that the measurement be listed in cubic feet (or Mcf), and not in Ccf, and that Staff is not seeking a change in the mercantile cutoff to 500,000 CCF, which would not appear to align with the revised code.

Case 22-0509-GA-ATA