A settlement was filed in the Dominion ‘Exit the Merchant Function’ case on Friday, February 7th. OPAE joined the Public Utilities Commission of Ohio Staff, the Ohio Consumers’ Counsel, and a handful of energy marketers, in the settlement, which makes significant changes in default service in Dominion’s service territory. For five years, all customers in Dominion that were not in a government aggregation buying pool or had a bilateral contract with a marketer defaulted to a Market Variable Rate (MVR). Residential customers could ask to be put on the Standard Choice Offer (SCO), generally the lowest available rate. Commercial customers could not get the SCO price. The Market Variable Rates are as high as $9.25 per Mcf, at a time when the SCO is $2.38 per Mcf.

Under the agreement, all residential customers and small businesses using less than 200 Mcf will again have access to the SCO as the default service price. The settlement calls for current MVR customers to be switched to the SCO within 60 days. Businesses with annual usage between 201 and 500 Mcf will be able to request the SCO. A new rate, the Market Retail Rate Commodity Service, will be the default rate for all commercial customers using more than 200 Mcf per year.

The Market Retail Rate Commodity Service (MRR) will be set at the median of all MRR rates submitted by participating marketers, meaning outliers like the Verde Energy $9.25 will not be forced on customers. The MRR will still be higher than the SCO, but customers should no longer get price gouged by marketers manipulating the system.

A key provision of the settlement prohibits any signatory party from requesting a change, including an exit from the merchant function, until 2024. This was important because Ohio law would otherwise allow the marketers, who lost this round, to file a motion to change what we just negotiated. With this ‘stay out’ provision, customers are assured of being able to buy gas at the lowest rate for the next four years.

Vectren and Columbia still use the SCO as the default service, so customers that don’t shop get one of the lowest rates. Duke uses a different approach to set its default price, but it is still below most marketer rates.