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Dominion East Ohio Energy Choice Update/ Merchant Function Issues. March 4, 2004. Energy Choice Enrollment. Participation Rates. Residential 56% Nonresidential 55%. 1/04 Energy Choice Market Shares (*). Other 11. D. A. C. B.

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Dominion east ohio energy choice update merchant function issues

Dominion East Ohio Energy Choice Update/ Merchant Function Issues

March 4, 2004

Energy choice enrollment
Energy Choice Enrollment

Participation Rates

Residential 56% Nonresidential 55%

1 04 energy choice market shares
1/04 Energy Choice Market Shares (*)

Other 11





The largest Choice pool is 39% as big as DEO’s remaining GCR customer base

(*) Includes supplier’s aggregation customers

Frps pool 2003 market shares
FRPS Pool 2003 Market Shares


Other 35





Merchant function exit discussions
Merchant Function Exit Discussions


  • Develop detailed transition plan under which DEO could exit merchant function

  • Does not have to include proposed date certain by which DEO exits


  • Hold several (2-4) meetings at which stakeholders could voice opinions on key issues

  • Assume that DEO exits merchant function (i.e., do not debate merits up front)

  • DEO develops comprehensive plan for further review or filing (with or without timetable)

Fundamental objectives
Fundamental Objectives

  • Adequate Reliability

    • System must remain reliable for default service and Energy Choice customers

  • Acceptable Pricing

    • Prices for default commodity and related services must be properly set

  • Appropriate Oversight

    • Commission must retain sufficient oversight to avoid unacceptable outcomes

Any exit of the merchant function must be METHODICAL

Provider of last resort timeline
Provider-of-Last-Resort Timeline



<1 Cycle


>1 Cycle


(1 Cycle)

  • Intra-Day Balancing

  • Daily Balancing

  • Single-Day Underdelivery

  • Multi-Day Underdelivery

  • Supplier Default

  • Monthly Balancing

  • Standard Offer Service

Potential discussion topics
Potential Discussion Topics

  • General Issues

  • Operational Issues

  • Customer Issues

  • Process Issues

    Should we move forward and, if so, when?

General issues
General Issues

  • What other models are worth reviewing?

  • What exactly does default service entail?

  • What are the default supplier’s responsibilities?

  • What is DEO’s role after exiting the merchant function?

  • What oversight does the Commission have of the default supplier?

  • What steps do we take to minimize the possibility of default by a default supplier?

Operational issues
Operational Issues

  • How do we maintain system reliability with DEO no longer in the GCR business?

  • What capacity does DEO need to retain in its role as system operator?

  • Is a reserve margin needed?

  • How do we deal with buying/selling storage in place and cash-out gas?

  • How do we respond to end use market changes (i.e., declining baseload usage)?

  • Does anything change in Energy Choice?

Customer issues
Customer Issues

  • Who “provides” the default service from the customer’s perspective?

  • How is the price for default service set and how frequently does it change?

  • How is the hand-off from GCR to default service handled?

  • Who is eligible for “standard” default service?

  • How do we inform customers?

  • How do we deal with credit and collections?

Process issues
Process Issues

  • What is the optimal time of year to make the transition?

  • Should default service be subjected to an RFP process and, if so, who makes the final selection?

  • How is default service billed to customers and how does the supplier get paid?

  • How does DEO recover the costs it incurs as system operator?

    • Operational balancing capacity, Storage inventory, UFG, Unrecovered gas costs