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PUC Staff: Average Disconnected Shopping Customer Charged Double Default Service Rate
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A discount rate needs to be added to the purchase of receivables program at Enbridge Gas Ohio (f/k/a Dominion East Ohio) to combat retail suppliers' "tactic" of "targeting low credit and unsophisticated customers with above market rates," Staff of the PUC of Ohio said in testimony in an Enbridge rate case
As first reported by EnergyChoiceMatters.com, Staff is seeking the addition of a discount rate, or other changes and limits to POR, to address uncollectibles and disconnections at Enbridge. The Enbridge/DEO POR program has not had any discount for approximately 20 years
Staff reported that, in a review of disconnection data at Enbridge, the price for shopping customers who had their service terminated was, on average, more than double the Standard Choice Offer rate
Staff further said that the retail rates charged to disconnected shopping customers were higher than the rates that retail suppliers posted on the state's Apples to Apples comparison site, "where few offers available are similarly priced [to the rates charged to terminated customers]."
Staff said that a retail supplier, not ratepayers or other retail suppliers in the market, should bear its collection costs to combat the charging of prices "well in excess" of market prices
A discount rate would, "provide a financial mechanism and consequence to CRNG [retail] suppliers
that target low credit or unsophisticated customers with high rates that is
lacking in the market today. A functioning competitive market should not
be subsidizing the practices of these competitors but providing
differentiation based on performance. A discount rate could provide a
further differentiation between CRNG suppliers," Staff said
While Staff offered several potential policies, a supplier-specific discount rate for POR was a possible solution cited by Staff
"A discount rate based on customer profile risk for each CRNGS supplier could assign collection costs to the cost causers directly," Staff said
"[B]y not assigning collection costs to the cost causer directly, competition between CRNGS suppliers is hampered," Staff testified
Adding recourse to purchased receivables, or capping the amount of the purchased receivables at the cost that would apply under the Standard Choice Offer rate, were other potential changes suggested by Staff
Staff said that Staff's sought review of the POR program should occur in a separate proceeding, and not the instant rate case
Staff reported that the amount of competitive charges purchased by Enbridge increased 36% over three years. Staff said that, during this time, residential gas use was at a three-year low.
Staff said that 93% of Enbridge's customers are served by a competitive supplier (due to the SCO), while 76% are customers who shop and are served by a non-default supplier
Staff cited such market maturity, as well as Enbridge's partial exit from the merchant function, as supporting changes to POR. Additionally, Staff made note of the Ohio electric choice markets which have "shopping" activity (largely reflecting opt-out aggregation) despite a lack of POR (Duke being the exception)
Staff conceded that Enbridge's disconnection practices also largely contribute to customer uncollectibles. Staff said that, on average, the time from a disconnection notice to service termination is 151 days at Enbridge. "The Company is simply not utilizing a utility’s best collection mechanism, a timely disconnection," Staff said
As a result of such a prolonged period, Staff said that the average amount owed by Enbridge customers at disconnection is more than $1,000.
Staff Seeks To Inform Vacillating Customers About Potentially Cheaper SCO Vs. Large Volume Transportation
In a report on Enbridge's application, PUCO Staff recommended that Enbridge be required to notify all GTS, DTS, and LVTGS [sic, LVECTS] transportation customers whose usage is at
or below 3000 mcf annually (the cutoff for general sales service or, for energy choice, non-large energy choice transportation service) of alternative tariff options which may be more economic. If the customer's usage decreases to 500 mcf annually, this proposal would result in Enbridge informing relevant customers of the availability of the Standard Choice Offer, which is not available to customers over 500 Mcf annual usage.
The Retail Energy Supply Association objected to Staff's recommendation insofar as it was not limited to informing customers who are below the 3,000 Mcf cutoff of more economic distribution rate classes. RESA raised a number of issues with Enbridge informing customers about alternative commodity service tariffs, arguing, among other things, that advice on economic commodity service alternatives would violate utility code of conduct rules
In testimony, Staff said that Enbridge informing customers about the utility's tariffs would not violate any rules
Staff said that, as part of describing, for customers falling below 3,000 Mcf, the service newly available to such customers under Energy Choice Transportation Service - Business
(ECTS-NR), Enbridge should inform these customers of the commodity options, which include retail supplier service, the default monthly retail rate option, or, if the customer is below 500 mcf, the SCO
"EOG [Enbridge] also should describe its SCO applicable rate schedule, when appropriate, as Staff believes it is also a duty of EOG," Staff said
Case No. 23-897-GA-ATA et al.
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PUC Staff Seeks New POR Discount Rate To Combat Retail Suppliers' "Tactic" Of Targeting Low Credit, "Unsophisticated" Customers
Staff Seeks To Inform Vacillating Customers About Potentially Cheaper SCO Vs. Transportation
January 13, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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