Bill Text: OH HB102 | 2013-2014 | 130th General Assembly | Introduced

---

Bill Title: To change state policy regarding natural gas competition, to require assessments on retail natural gas suppliers for subsidies granted in retail auctions, and to require the assessments to be distributed to nonmercantile customers.

Spectrum: Partisan Bill (Republican 7-0)

Status: (Introduced - Dead) 2013-03-13 - To Public Utilities [HB102 Detail]

Download: Ohio-2013-HB102-Introduced.html

---

As Introduced

130th General Assembly Regular Session 2013-2014

H. B. No. 102

Representative Roegner 

Cosponsors: Representatives Brenner, Lynch, DeVitis, Thompson, Adams, J., Hall 

---

A BILL

To amend sections 4929.01 and 4929.02 and to enact

1

sections 4929.021 and 4929.022 of the Revised Code

2

to change state policy regarding natural gas

3

competition, to require assessments on retail

4

natural gas suppliers for subsidies granted in

5

retail auctions, and to require the assessments to

6

be distributed to nonmercantile customers.

7

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1.  That sections 4929.01 and 4929.02 be amended and	8
sections 4929.021 and 4929.022 of the Revised Code be enacted to	9
read as follows:	10

Sec. 4929.01.  As used in this chapter:

11

(A) "Alternative rate plan" means a method, alternate to the	12
method of section 4909.15 of the Revised Code, for establishing	13
rates and charges, under which rates and charges may be	14
established for a commodity sales service or ancillary service	15
that is not exempt pursuant to section 4929.04 of the Revised Code	16
or for a distribution service. Alternative rate plans may include,	17
but are not limited to, methods that provide adequate and reliable	18
natural gas services and goods in this state; minimize the costs	19
and time expended in the regulatory process; tend to assess the	20
costs of any natural gas service or goods to the entity, service,	21
or goods that cause such costs to be incurred; afford rate	22
stability; promote and reward efficiency, quality of service, or	23
cost containment by a natural gas company; provide sufficient	24
flexibility and incentives to the natural gas industry to achieve	25
high quality, technologically advanced, and readily available	26
natural gas services and goods at just and reasonable rates and	27
charges; or establish revenue decoupling mechanisms. Alternative	28
rate plans also may include, but are not limited to, automatic	29
adjustments based on a specified index or changes in a specified	30
cost or costs.	31

(B) "Ancillary service" means a service that is ancillary to	32
the receipt or delivery of natural gas to consumers, including,	33
but not limited to, storage, pooling, balancing, and transmission.	34

(C) "Commodity sales service" means the sale of natural gas	35
to consumers, exclusive of any distribution or ancillary service.	36

(D) "Comparable service" means any regulated service or goods	37
whose availability, quality, price, terms, and conditions are the	38
same as or better than those of the services or goods that the	39
natural gas company provides to a person with which it is	40
affiliated or which it controls, or, as to any consumer, that the	41
natural gas company offers to that consumer as part of a bundled	42
service that includes both regulated and exempt services or goods.	43

(E) "Consumer" means any person or association of persons	44
purchasing, delivering, storing, or transporting, or seeking to	45
purchase, deliver, store, or transport, natural gas, including	46
industrial consumers, commercial consumers, and residential	47
consumers, but not including natural gas companies.	48

(F) "Distribution service" means the delivery of natural gas	49
to a consumer at the consumer's facilities, by and through the	50
instrumentalities and facilities of a natural gas company,	51
regardless of the party having title to the natural gas.	52

(G) "Natural gas company" means a natural gas company, as	53
defined in section 4905.03 of the Revised Code, that is a public	54
utility as defined in section 4905.02 of the Revised Code and	55
excludes a retail natural gas supplier.	56

(H) "Person," except as provided in division (N) of this	57
section, has the same meaning as in section 1.59 of the Revised	58
Code, and includes this state and any political subdivision,	59
agency, or other instrumentality of this state and includes the	60
United States and any agency or other instrumentality of the	61
United States.	62

(I) "Billing or collection agent" means a fully independent	63
agent, not affiliated with or otherwise controlled by a retail	64
natural gas supplier or governmental aggregator subject to	65
certification under section 4929.20 of the Revised Code, to the	66
extent that the agent is under contract with such supplier or	67
aggregator solely to provide billing and collection for	68
competitive retail natural gas service on behalf of the supplier	69
or aggregator.	70

(J) "Competitive retail natural gas service" means any retail	71
natural gas service that may be competitively offered to consumers	72
in this state as a result of revised schedules approved under	73
division (C) of section 4929.29 of the Revised Code, a rule or	74
order adopted or issued by the public utilities commission under	75
Chapter 4905. of the Revised Code, or an exemption granted by the	76
commission under sections 4929.04 to 4929.08 of the Revised Code.	77

(K) "Governmental aggregator" means either of the following:

78

(1) A legislative authority of a municipal corporation, a	79
board of township trustees, or a board of county commissioners	80
acting exclusively under section 4929.26 or 4929.27 of the Revised	81
Code as an aggregator for the provision of competitive retail	82
natural gas service;	83

(2) A municipal corporation acting exclusively under Section	84
4 of Article XVIII, Ohio Constitution, as an aggregator for the	85
provision of competitive retail natural gas service.	86

(L)(1) "Mercantile customer" means a customer that consumes,	87
other than for residential use, more than five hundred thousand	88
cubic feet of natural gas per year at a single location within	89
this state or consumes natural gas, other than for residential	90
use, as part of an undertaking having more than three locations	91
within or outside of this state. "Mercantile customer" excludes a	92
customer for which a declaration under division (L)(2) of this	93
section is in effect pursuant to that division.	94

(2) A not-for-profit customer that consumes, other than for	95
residential use, more than five hundred thousand cubic feet of	96
natural gas per year at a single location within this state or	97
consumes natural gas, other than for residential use, as part of	98
an undertaking having more than three locations within or outside	99
this state may file a declaration under division (L)(2) of this	100
section with the public utilities commission. The declaration	101
shall take effect upon the date of filing, and by virtue of the	102
declaration, the customer is not a mercantile customer for the	103
purposes of this section and sections 4929.20 to 4929.29 of the	104
Revised Code or the purposes of a governmental natural gas	105
aggregation or arrangement or other contract entered into after	106
the declaration's effective date for the supply or arranging of	107
the supply of natural gas to the customer to a location within	108
this state. The customer may file a rescission of the declaration	109
with the commission at any time. The rescission shall not affect	110
any governmental natural gas aggregation or arrangement or other	111
contract entered into by the customer prior to the date of the	112
filing of the rescission and shall have effect only with respect	113
to any subsequent such aggregation or arrangement or other	114
contract. The commission shall prescribe rules under section	115
4929.10 of the Revised Code specifying the form of the declaration	116
or a rescission and procedures by which a declaration or	117
rescission may be filed.	118

(M) "Retail natural gas service" means commodity sales	119
service, ancillary service, natural gas aggregation service,	120
natural gas marketing service, or natural gas brokerage service.	121

(N) "Retail natural gas supplier" means any person, as	122
defined in section 1.59 of the Revised Code, that is engaged on a	123
for-profit or not-for-profit basis in the business of supplying or	124
arranging for the supply of a competitive retail natural gas	125
service to consumers in this state that are not mercantile	126
customers. "Retail natural gas supplier" includes a marketer,	127
broker, or aggregator, but excludes a natural gas company, a	128
governmental aggregator as defined in division (K)(1) or (2) of	129
this section, an entity described in division (A)(2) or (3) of	130
section 4905.02 of the Revised Code, or a billing or collection	131
agent, and excludes a producer or gatherer of gas to the extent	132
such producer or gatherer is not a natural gas company under	133
section 4905.03 of the Revised Code.	134

(O) "Revenue decoupling mechanism" means a rate design or	135
other cost recovery mechanism that provides recovery of the fixed	136
costs of service and a fair and reasonable rate of return,	137
irrespective of system throughput or volumetric sales.	138

(P) "Standard choice offer" means a default commodity sales	139
service provided by a retail natural gas supplier.	140

Sec. 4929.02.  (A) It is the policy of this state to,	141
throughout this state:	142

(1) Promote the availability to consumers of adequate,	143
reliable, and reasonably priced natural gas services and goods;	144

(2) Promote the availability of unbundled and comparable	145
natural gas services and goods that provide wholesale and retail	146
consumers with the supplier, price, terms, conditions, and quality	147
options they elect to meet their respective needs;	148

(3) Promote diversity of natural gas supplies and suppliers,	149
by giving consumers effective choices over the selection of those	150
supplies and suppliers;	151

(4) Encourage innovation and market access for cost-effective	152
supply- and demand-side natural gas services and goods;	153

(5) Encourage cost-effective and efficient access to	154
information regarding the operation of the distribution systems of	155
natural gas companies in order to promote effective customer	156
choice of natural gas services and goods;	157

(6) Recognize the continuing emergence of competitive natural	158
gas markets through the development and implementation of flexible	159
regulatory treatment;	160

(7) Promote an expeditious transition to the provision of	161
natural gas services and goods in a manner that achieves effective	162
competition and transactions between willing buyers and willing	163
sellers to reduce or eliminate the need for regulation of natural	164
gas services and goods under Chapters 4905. and 4909. of the	165
Revised Code;	166

(8) Promote effective competition in the provision of natural	167
gas services and goods by avoiding subsidies flowing to or from	168
regulated natural gas services and goods, which includes avoiding	169
subsidies of standard choice offers provided through retail	170
auctions;	171

(9) Ensure that the risks and rewards of a natural gas	172
company's offering of nonjurisdictional and exempt services and	173
goods do not affect the rates, prices, terms, or conditions of	174
nonexempt, regulated services and goods of a natural gas company	175
and do not affect the financial capability of a natural gas	176
company to comply with the policy of this state specified in this	177
section;	178

(10) Facilitate the state's competitiveness in the global	179
economy;	180

(11) Facilitate additional choices for the supply of natural	181
gas for residential consumers, including aggregation;	182

(12) Promote an alignment of natural gas company interests	183
with consumer interest in energy efficiency and energy	184
conservation.	185

(B) The public utilities commission and the office of the	186
consumers' counsel shall follow the policy specified in this	187
section in exercising their respective authorities relative to	188
sections 4929.03 to 4929.30 of the Revised Code.	189

(C) Nothing in Chapter 4929. of the Revised Code shall be	190
construed to alter the public utilities commission's construction	191
or application of division (E) of section 4905.03 of the Revised	192
Code.	193

Sec. 4929.021.  Subsidies of standard choice offers provided	194
through retail auctions shall be avoided. These subsidies include	195
the avoidance of costs normally incurred in acquiring retail	196
natural gas customers and in serving customers as a retail natural	197
gas supplier under this chapter and rules adopted under it. These	198
avoided costs include the following:	199

(A) Regulatory-compliance costs;

200

(B) Enrollment costs;

201

(C) Contracting costs;

202

(D) Costs of notice requirements;

203

(E) Customer-acquisition costs;

204

(F) Other costs related to the provision of retail natural	205
gas service.	206

Sec. 4929.022.  (A) Not later than ninety days after the	207
effective date of this section, the public utilities commission	208
shall begin a process to examine in retail auctions conducted	209
after the effective date of this section any subsidies of standard	210
choice offers, as those subsidies are described in section	211
4929.021 of the Revised Code. If the commission determines that	212
any such subsidies are granted in a retail auction, the commission	213
shall quantify those subsidies and make an assessment on each	214
retail natural gas supplier that is granted those subsidies. Each	215
assessment shall be based on the subsidies granted to a particular	216
retail natural gas supplier and shall be made on a per-customer	217
basis.	218

(B) Each assessment made under division (A) of this section	219
shall be paid by the retail natural gas supplier to the natural	220
gas company that conducted the retail auction in which the	221
subsidies were granted. Each natural gas company shall distribute	222
the total of all assessments paid to it under this division to all	223
of the company's customers who are not mercantile customers. The	224
distribution shall be made through a commission-determined	225
mechanism.	226

Section 2.  That existing sections 4929.01 and 4929.02 of the	227
Revised Code are hereby repealed.	228