Utility With High Migration Choice Program Proposes Reduced Tolerances For Imbalance Penalties

Update: Utility NOT Proposing Higher Supplier Creditworthiness Standards, Says Changes Included In Pre-Filing Notice Were In Error

October 31, 2023

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Reporting by Paul Ring • ring@energychoicematters.com

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As part of a newly filed rate case, Dominion East Ohio (Dominion Energy Ohio or DEO) is proposing lower tolerances for imbalance penalty multipliers, under its General Terms and Conditions of Energy Choice Pooling Service

Currently, negative imbalances beyond a threshold are subject to multipliers of the penalty price. DEO proposes to lower these thresholds for the multiplier to take effect

Currently, negative imbalances are subject to a price multiplier as follows:

Negative Imbalance                      Maximum
   Percentage                          Reference
                                   Price Multiplier
From 0% up to and including 25%           1.00
Over 25% up to and including 50%          1.25
Over 50%                                  1.50 

DEO proposes to lower these multiplier thresholds to the following:

Negative Imbalance                      Maximum
   Percentage                          Reference
                                   Price Multiplier
From 0% up to and including 5%            1.00
Over 5% up to and including 15%           1.25
Over 15%                                  1.50 

"DEO proposes reducing the tolerances under which the price multiplier escalates, to further incentivize system balancing and reduce operational balancing activities and the associated costs that may be recoverable from other customers," DEO said

Dominion East Ohio (Dominion Energy Ohio or DEO) is also proposing to end the current mechanism whereby the costs of PUC and OCC assessments are essentially bypassable (via a bypassable credit mechanism), with such costs recovered through base rates DEO proposes to accomplish this through elimination of the Transportation Surcredit Rider.

Currently, the Transportation Surcredit Rider provides a credit of $0.0173 per Mcf to all volumes under the following service schedules: Energy Choice Transportation Service – Residential; Energy Choice Transportation Service – Nonresidential; and Large Volume Energy Choice Transportation Service

While SSO customers also receive the credit, all General Sales Service (SSO) customers are also subject to a charge in the same amount which is added to the standard service offer gas cost rate (e.g. the SSO). As such, the costs of the PUC/OCC assessments are currently bypassable to non-SSO customers.

It is worth noting that the applicability of the SSO is generally limited at DEO to customers ineligible for choice service (including SCO service)

DEO said, "the [PUC/OCC] assessments are proposed for recovery in base rates for all customers," and therefore DEO said that the Transportation Surcredit Rider mechanism is no longer necessary

As of publication time, there was no additional information from DEO concerning this proposal (e.g. no testimony yet filed). Notwithstanding the limited availability of the SSO, it was not clear why DEO believes recovery through base rates for all customers makes the need for the rider moot, unless the assessment would no longer be applied to suppliers (which was not discussed in the filings currently available)

With regards to supplier creditworthiness, DEO said that it is not seeking to revise the minimum unsecured credit ratings under the initial creditworthiness standards for choice suppliers, further stating that an earlier filing was in error

As previously reported, DEO's pre-filing notice (PFN) had included changes indicating that DEO would increase the initial creditworthiness standard to A- or higher from Standard & Poors or Moody’s, from the current level of BBB- (S&P) or Baa3 (Moody’s).

DEO said, "Due to an internal misunderstanding, the PFN tariff disclosed an increase in minimum unsecured credit ratings from BBB- and Baa3 to A-. This change was not intended, and the Schedule E tariffs have reverted to and maintain the original minimum credit ratings."

DEO is maintaining its proposal that bankrupt suppliers with debtor-in-possession financing are no longer exempt from the customary finding that a bankruptcy supplier does not meet the creditworthiness standards under the choice tariff. See more details on this change here

DEO proposes to delete language requiring that DEO, in response to customer inquiries about retail suppliers, to, "provide a list of all Suppliers operating on its system[.]"

Instead, DEO would, in response to such inquiring customers, "direct the Customer to generally available information about Suppliers operating on its system[.]"

DEO also proposes to eliminate Transportation Migration Rider – Part A, due to its significant exit from the merchant function. Currently, Transportation Migration Rider – Part A is an additional charge of $.099 per Mcf applied to all volumes transported under the Daily Transportation Service, General Transportation Service, and Transportation Service for School’s rate schedules.

Case 23-0897-GA-ATA et al.

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