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In Duke Energy of Ohio utility rate case and approval of accompanying tariffs:

Excerpts from RESA & IGS comments generally supporting utility’s request for expedited treatment:

“RESA and IGS concur with the request for a review of the tariffs on an expedited basis and are willing to support Duke’s proposals because, as Duke noted, it was not anticipated that the Commission’s decision would be issued so close to April 1, 2025, and time is needed for implementation.”

“Additionally, the impact of an upcoming interstate pipeline rate increase is a further and important consideration specific for the proposals for changing the balancing services effective June 1, 2025, and for retaining the two balancing services’ rates until then. RESA and IGS explain their positions further below.”

Excerpts from utility’s motion for expedited review:

{***} “On December 4, 2024, the Commission issued an Opinion and Order (“Order”) which, among other things, directed Duke Energy Ohio, Inc. (Duke Energy Ohio or Company) to file compliance tariffs consistent with the Order. 

Duke Energy Ohio has therefore filed concurrently with this Motion proposed tariffs which it believes are consistent with the Order. Duke Energy Ohio believes that its proposed compliance tariffs are consistent with the Commission’s Order. However, there are two areas which Duke Energy Ohio was not able to conclusively resolve in its post-decision, tariff-related discussions with Commission Staff: (1) when should the Standard Service Offer (SSO) auctions start procuring gas for customers; and (2) when should the balancing changes addressed by the Order go into effect. To ensure that Duke Energy Ohio is operating in accordance with the will of the Commission, Duke Energy Ohio is filing this Motion to specifically call attention to these two issues and to request review of the proposed compliance tariffs before they go into effect, some of which will go into effect on June 1, 2025 and others of which on April 1, 2026 as explained in the attached Memorandum in Support.” {***} [Emphasis added.]

{***} “The Company also requests that the Public Utilities Commission of Ohio (Commission) grant this Motion and provide any corrections or changes to the compliance tariffs on an expedited basis pursuant to O.A.C. 4901-1-12(C). A timely review and approval of the tariffs will allow Duke Energy Ohio to notify market participants so that they can make appropriate arrangements in accordance with the revised tariffs. The reasons for this Motion are set forth more fully in the attached Memorandum in Support.” {***}

Excerpts from utility’s attached motion for expedited review:

{***} “ Duke Energy Ohio believes that the proposed compliance tariffs included with this Motion are consistent with the intent of both the Stipulation filed on August 25, 2023 and the December 4, 2024 Order. However, Duke Energy Ohio has identified two areas that it was unable to resolve in conversations with Commission Staff. To ensure that Duke Energy Ohio is operating in accordance with the will of the Commission, Duke Energy Ohio requests review of the proposed compliance tariffs before they go into effect on June 1, 2025, and April 1, 2026.” {***}

{***} “ A. SSO Auctions Effective April 1, 2026 

The Order approved Duke Energy Ohio’s application to institute a standard service offer auction process to procure gas for non-shopping customers. 

Duke Energy Ohio believes conducting the first auction in February 2026, with service to begin April 1, 2026, repeating annually thereafter, would be appropriate and consistent with the Order. Duke Energy Ohio has therefore included that date in its proposed compliance tariffs. This schedule would provide time for bidder education for this auction type in Ohio, information exchange as part of the bidding process, and for an orderly auction process, well in advance of the delivery period, all in accordance with the Order. As the gas year starts on April 1st each year, this timing would also be consistent with the auctions held by other Ohio gas distribution utilities. 

If SSO service were to begin on April 1, 2025, that date would not permit sufficient time to educate bidders and conduct an orderly auction process before the delivery date. If there is not sufficient bidder participation, it could lead to higher costs for customers which would not be consistent with the intent of the Order.” {***}

{***} “B. Changes To Balancing Delayed from April 1, 2025 to June 1, 2025 

The Stipulation was filed on August 25, 2023, and anticipated that balancing changes to tariffs Enhanced Firm Balancing Service (Rider EFBS) and Firm Balancing Service (Rider FBS), and the implementation of a new tariff, Supplier Balancing Costs (Rider SBC), would be effective April 1, 2025.

Unfortunately, the Stipulation as approved by the Commission in the Order did not anticipate or address the Commission decision being issued so close in time to the anticipated April 1, 2025, effective date. That is problematic because the Stipulation anticipated a period of adjustment for market participants before this change would go into effect: 

Balancing fees are currently included in the CRNGS contract prices paid by shopping customers. In order to allow time for the market to reflect the fact that these charges will be billed directly to customers, there needs to be a period in which the competitive market is informed of and educated about this transition so that market participants can account for it in their pricing.3

As part of that adjustment period, the Stipulation anticipated a period in which customers and CRNGS would be notified of the upcoming changes. In particular, CRNGS would be given time to make their internal changes and would have six months to verify that they have removed balancing charges from their pricing: 

The Company will notify customers via bill messages of implementation of this Stipulation upon Commission approval. The Company will notify all CRNGS providers of the change and require each CRNGS to submit a statement/affidavit to Duke Energy Ohio that it has modified its customer rates accordingly and has complied with the terms of this provision. The Company shall notify Staff if any CRNGS provider does not complete the statement/affidavit within six (6) months of the Commission decision approving this Stipulation. The Company agrees to discuss wording of such bill messages and notice to CRNGS providers with the Signatory Parties.4

To reconcile the intent of the Order, that changes be implemented on April 1, 2025, while also providing CRNGS the stipulated period for market adjustment, Duke Energy Ohio proposes that the balancing changes will be effective June 1, 2025. This slight delay will provide market participants the requisite time for adjustment anticipated by the Order while still implementing the balancing changes as quickly as possible after the six-month period ends.

Modifying the start from April 1, 2025, to June 1, 2025, while consistent with the Order, will result in the EFBS & FBS rates ending mid-gas year. Balancing charges are currently passed through to CRNGS and change over time. For example, if an interstate pipeline modifies its rates temporarily while a rate increase is pending at FERC, the higher rates are currently passed through to CRNGS via balancing charges. If a refund is issued when lower rates are ultimately approved that refund is passed back to CRNGS either immediately or as part of an audit process. As that true up will not be easily achieved after the effective date of the change, in order to fulfill the intent of the Order, Duke Energy Ohio is proposing that EFBS and FBS rates will not be modified on April 1, 2025. Instead EFBS and FBS rates will remain unchanged until they are eliminated on June 1, 2025. Rider SBC will take effect on June 1, 2025. Any over or under recovery would be trued up in the future through the SSO Cost Reconciliation Rider (Rider SSOCR) and Contract Commitment Cost Recovery Rider (Rider CCCR) to make Gas Cost Recovery (Rider GCR) customers whole as part of the final audit after the SSO is implemented on April 1, 2026. While it would have been preferable to start the SSO auction and balancing changes on April 1st with the new gas year, Duke Energy Ohio believes its proposal captures the intent of the Stipulation and Commission Order.” {***}

Joint Response of RESA & IGS.   (01/10/2025)
Utility Motion For Expedited Review Of Compliance Tariffs (01/03/2025)
21-903-GA-EXM  (08/31/2021)
(Duke Energy Ohio, Inc. – Exemption for Natural Gas Sales or Services)