PUCO's Roberto: Competitive Supply Customers Not Excluded from Columbus Southern Power SEET Credit

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March 10, 2011  

Public Utilities Commission of Ohio Commissioner Cheryl Roberto said in a dissent yesterday that the Commission's decision on the payment of a credit to Columbus Southern Power customers under the Significantly Excessive Earnings Test (SEET) does not exclude customers taking competitive supply (10-1261-EL-UNC).

Roberto's statement, combined with PUCO's January 27 modified order on the SEET credit, finally lends come clarity on the applicability of the credit to competitive supply customers.

Originally, as only noted by Matters (see 1/28), the tariff filing by Columbus Southern Power to implement the SEET credit appeared to only pay the credit to customers taking supply from Columbus Southern Power, as a tariff sheet was only included for the bundled service tariff, and no similar tariff sheet for a credit was filed for the retail access distribution tariff.

The SEET over-earnings result from electric security plan rates for generation, which are bypassable, and distribution, which are not bypassable and paid by competitive supply customers. PUCO did not make a determination as to which rates, bypassable or nonbypassable, contributed to the over-earnings.

In a order issued January 27, the main thrust of which was to exclude reasonable arrangement customers taking supply from CSP under subsidized rates from receiving the credit, PUCO said that, '[u]pon further consideration of the application of the credit to all customer bills [emphasis added], the Commission clarifies that reasonable arrangement customers who receive service under a discount rate supported by delta revenue recovery are not entitled to both the discount rate and a SEET credit." This language ostensibly provided the SEET credit to competitive supply customers.

Columbus Southern Power filed revised tariff sheets as a result of the January 27 order. Although the revised filing with PUCO listed only a tariff sheet applicable to bundled service customers, CSP did post on its website a modified open access distribution tariff with a new tariff page providing that a SEET credit, in an equal amount as provided to bundled service customers, shall be paid to competitive supply customers (Original Sheet No. 87-1D).

However, until Roberto's dissent issued yesterday, the PUCO had never explicitly discussed treatment of competitive supply customers under the SEET. Roberto confirmed that the Commission's intention, accurately reflected in the updated CSP tariffs, was that payment of the SEET credit, "shall not exclude CSP distribution consumers who shop for their energy."

On rehearing yesterday, PUCO affirmed its earlier order that reasonable arrangement customers -- customers who purchase supply from Columbus Southern Power but at a subsidized rate -- are ineligible for the credit. Roberto said that PUCO should have determined the source of the over-earnings, and believes that a more complete record would support a conclusion that the over-earnings relate to generation service. If such a record had been developed, both competitive supply customers and reasonable arrangement customers should have been excluded from receiving the credit, Roberto sad. However, as PUCO did not make any such specific findings as to the source of over-earnings, Roberto said that the credit should be paid to competitive supply customers (as provided), as well as reasonable arrangement customers (which the order specifically rejects).

The SEET credit is $0.001395/kWh, to be paid through December 2011. However, much of the SEET over-earnings were applied to reduce CSP's deferred fuel charges, which, depending on the time horizon of future recovery, would have been either bypassable or non-bypassable. In other words, although competitive supply customers will receive an equal SEET credit, part of their contribution to the over-earnings was applied to reduce a bypassable charge, whose reduction does not benefit them.

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