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Pa. PUC Rejects On-Bill Comparison Of Retail Supplier, Default Service Costs (As Proposal At Another Utility Is Pending)
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The Pennsylvania PUC has resolved a rate case proceeding without adopting a proposed on-bill comparison of retail supplier costs and shadow-billed default service costs for shopping customers on utility consolidated billing, but the ruling may have little precedential value given the unique circumstances in a similar proposal at another utility
Specifically, in issuing a decision in a rate case at Peoples Natural Gas LLC, the PUC did not adopt a proposal from the Office of Consumer Advocate that Peoples should be required to provide additional customer "education" about shopping for those customers who are paying a retail supplier rate in excess of the price to compare, with OCA specifically proposing that Peoples' utility consolidated bills should include a direct, "side-to-side, apples-to-apples," comparison.
Initial testimony from an OCA witness described the proposed comparison as, "calculat[ing] what the bill would be under default service," though references to the proposal in briefs and a recommended decision describe the proposal as a side by side comparison of the retail supplier and default service "commodity price[s]", rather than referring to monthly "costs" under retail supplier service and shadow-billed sales service (the PTC is already included on Peoples' UCB, though presumably not directly side by side with the NGS rate)
Notably, Peoples opposed OCA's specific recommendations on the shopping comparison. While Peoples said that it was open to discussions concerning the provision of additional details to shopping customers to assist customers, "in deciding whether or not to renegotiate with their current supplier, to shop and
choose another supplier, or return to default service," Peoples said that, "the Commission’s policy on advising shopping customers is for the utility to post the price to compare."
Peoples suggested that the issue is better addressed in a generic proceeding, not a rate case
Peoples' opposition to the shadow billing or other similar comparison of default service and retail supplier costs makes its rate case unique versus a similar proposal in PECO's electric default service proceeding (see story here). At PECO, an on-bill comparison of shadow billed default service costs and the customer's retail supplier costs was proposed by PECO itself, and supported by several parties in a non-unanimous settlement. This greater support, including from the utility which would bear the compliance obligation, for the shadow billing comparison at PECO, as opposed to the responsible utility opposing a similar proposal in the Peoples proceeding, may cause the PUC to address the proposals differently
Moreover, while the PUC ultimately did not adopt OCA's shadow billing proposal at Peoples, it did so in a perfunctory manner without the Commission itself discussing the merits or drawbacks of the proposal, due to the procedural tenor of the case. A recommended decision from a Pennsylvania PUC ALJ had recommended denying OCA's shadow billing proposal, and OCA did not file an exception to this aspect of the recommended decision. Thus, the Commission itself did not specifically address the shadow billing issue in ruling on the recommended decision and adopting the recommended decision
OCA had, in support of its sought bill comparison of supplier and sales service rates, reported that, of over 80,000 residential shopping customers at Peoples in December 2023, 99% were paying more than default service, and 86% were paying more than twice the price to compare
In rejecting OCA's bill comparison proposal, the ALJ had found in the recommended decision that, "There are abundant resources available for consumers who wish to shop for alternatives to default service for gas supply. It is not necessary to impose additional requirements on Peoples as a gas distribution company or upon Peoples’ non-shopping ratepayers for any additional costs that may be associated with adopting OCA’s recommendations."
Updated POR Discount Rates, Merchant Function Charges
As part of the rate case, the Merchant Function Charge (MFC) percentages, which are included in the Price to Compare and which are already identical at both of Peoples rate divisions (discussed below), have been updated.
The actual MFC charges will be based on the application of the MFC percentages to the updated Purchased Gas Cost rates, effective October 1
For residential Rate RS and Rate GS-T customers, the MFC will be set by multiplying a write-off factor of 2.200% times the gas cost charge, versus the current factor of 2.448%
For Small, Medium, and Large General Service customers under Rates SGS, MGS, LGS and Rate
GS-T, the MFC will be set by multiplying a write-off factor of 0.332% times the gas cost charge, versus the current factor of 0.211%
The POR write-off discounts have also been updated, and equal the MFC write-off percentages
The new residential POR write-off discount is 2.20%, versus the current 2.49%
The new non-residential POR write-off discount is 0.332%, versus the current 0.21%
A POR administrative adder discount of 0.0213% still applies
A term of the settlement which was adopted by the PUC states, "Any shortfall in recovery of the uncollectible
expenses and administrative costs of the POR program will not
be recovered from sales customers."
There is no change in the bypassable Gas Procurement Charge (GPC), which remains $0.0865 per Mcf for residential and Small General Service (SGS) customers and which is part of the price to compare
Combined PNG and PG Rates, Tariffs
The PUC's order approves the merger of the current Peoples Natural Gas Division (PNGD) and Peoples Gas Division (PGD) rate districts into a single, combined distribution rate tariff
The PNGD and PGD rate districts have shared the same price to compare for some time
However, Allegheny Valley Connector (AVC) capacity charges are not currently assigned to customers at PGD. At PNGD, AVC costs are collected through a surcharge applicable to all customers, and are not included in the bypassable price to compare
Under the PUC's order, AVC capacity charges will now be charged to customers at both PGD and PNGD, as a surcharge which is separate from the PTC
Additionally, under the adopted consolidation of the PGD and PNGD rate districts into a single tariff, a new single, combined supplier tariff will apply
Compared to the current PNGD supplier tariff, the combined tariff strikes language providing that Peoples shall receive, for a retail supplier's account, "Imbalance Trading Volumes". The new language states that Peoples shall receive from NGSs only upstream pipeline transportation volumes,
local gas volumes, storage volumes, and Pool-to-Pool Volumes
The adopted new combined supplier tariff also changes the gas quality metrics applicable to NGS supplies, while adding explicit language allowing Peoples to reject non-conforming supplies
Under the new tariff, unless otherwise agreed to by Peoples, NGS supplies shall not contain more than:
(a) Seven (7) pounds of water per million cubic feet on an approved dew point apparatus.
(b) Four (4) percent by volume total inerts including carbon dioxide, nitrogen, argon, and helium
provided that total carbon dioxide content shall not exceed two (2) percent by volume.
(c) Thirty hundredths (0.3) grains of hydrogen sulfide per 100 cubic feet.
(d) Ten (10) grains of total sulfur per 100 cubic feet.
(e) Two tenths (0.2) percent by volume oxygen.
(f) No more than (5) percent Hydrogen.
In contrast, the current PNGD supplier tariff provides that NGS supplies shall not contain more than:
(a) Seven (7) pounds of water per million cubic feet on an approved dew point apparatus.
(b) Two (2) percent by volume of carbon dioxide.
(c) Twenty-five hundredths (0.25) grains of hydrogen sulfide per 100 cubic feet.
(d) Ten (10) grains of total sulfur per 100 cubic feet.
The new combined supplier tariff adds language stating that, "Nonconformance - If the gas offered for delivery by the NGS shall fail at any time to conform to any of
the specifications set forth herein, then the Company shall notify the NGS of such deficiency and may
at the Company’s option refuse to accept delivery pending correction by the NGS. Should any
substances not in conformity with the quality standards specified herein enter the Company’s facilities
and cause damage to gas meters, regulators and/or other equipment, or interruption of service, NGS
shall reimburse the Company for the costs to repair such damage and for any related costs which the
Company may incur to restore service to, and/or repair facilities, of its Customers, including payments
made by the Company to Customers in settlement of claims arising out of interruption of gas service."
Docket R-2023-3044549
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OCA: 99% Of Shopping Customers Had Rates Exceeding Price To Compare; 86% Paying 2x PTC
POR Discount Rates Updated
September 13, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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