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PUCO Accepts Results of Dominion East Ohio’s Gas Supply Auction

February 15, 2016 By Cheryl Kaften

The Public Utilities Commission of Ohio (PUCO) announced on February 3 that it had accepted (Docket No. 07-1224-GA-EXM) the results of Dominion East Ohio’s auction for its standard service offer (SSO) and standard choice offer (SCO).

Cleveland-based Dominion East Ohio is a subsidiary of Dominion Energy and, according to the company, is the fourth- largest local gas distribution company among American Gas Association members. In the Buckeye State, the company serves 1.2 million customers in a territory that covers Cleveland, Akron, Canton and Youngstown in northeastern Ohio; Lima in western Ohio; and Marietta in southern Ohio.

The auction secured natural gas supplies – at a price that reflects the winning bidders’ estimates of their cost to deliver natural gas from the production site to the Dominion service areas – for utility’s SSO/SCO customers for the 12-month period starting April 1 and going through March 31, 2017.

Seven bidders participated via the Internet. The names of the four winning bidders will remain confidential for 15 days to protect the suppliers’ positions in contract negotiations with pipeline companies.

The auction resulted in a discount of $0.05 per thousand cubic feet (Mcf) off the New York Mercantile Exchange (NYMEX) month-end settlement price. Dominion’s SSO/SCO rate changes monthly and will be calculated as the NYMEX month-end settlement price minus $0.05 per Mcf.

The auction follows the decision of the Ohio Supreme Court last September (Slip Opinion No. 2015-OHIO-3627) to affirm a PUCO finding authorizing Dominion East Ohio to terminate its standard choice rate offer to commercial and industrial customers – a move toward becoming a “pipes only” company.

The utility proposed that the transition could be completed in two steps:

  • First, the utility proposed an interim wholesale model, which would enable it to continue to provide commodity service using an auction process to obtain wholesale gas supplies.
  • Second, Dominion planned to transfer any remaining non-shoppers to third-party retail suppliers.

Now, non-residential and large volume customers, or any Energy Choice customers whose contracts have expired, will return to SSO for up to two billing periods and then will be assigned to a retail supplier at the supplier’s monthly variable rate (MVR).

The SCO applies to Dominion’s residential choice-eligible customers who have not selected an alternative supplier. Choice-eligible customers will continue to have the option to enroll with an energy choice supplier of their own preference, join a government aggregation group, or select the SCO. Customers who are interested in choosing an energy choice supplier can compare rate offers using the PUCO’s Energy Choice Ohio “Apples to Apples” comparison charts.

Each SCO customer’s bill will indicate the certified retail natural gas supplier that is responsible for providing the customer’s natural gas. Customers who already are enrolled with an alternative supplier or a government aggregation group will not be affected by the change in the SCO rate; their contracts will remain the same. Customers who are enrolled in the Percentage of Income Payment Plan Plus or who are otherwise ineligible to participate in energy choice are served at the SSO rate, which is identical to the SCO rate. Dominion will continue to deliver natural gas to all customers, offer payment plans and respond to all emergency and customer service calls.

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