Ohio Energy Report: November 2023
Dominion Energy Ohio Files New Rate Case
On October 31, 2023, Dominion Energy Ohio (DEO) filed a new rate case with the Public Utilities Commission of Ohio (PUCO). As stated in the application, DEO is seeking approval of an increase in distribution rates for natural gas service, an alternative rate plan, changes in DEO’s accounting methods, and revisions to it’s tariffs.
The proposed changes to base distribution rates for DEO customers on non-negotiated rates are significant. The magnitude of the rate increases is not entirely unsurprising as this is the first time DEO is seeking to change base distribution rates since it filed its last base distribution rate case in July of 2007.
DEO estimates that the rate changes proposed, if approved, would increase gross revenues by approximately $212 million per year. The tables below summarize the current and proposed base customer service charges and base volumetric charges according to DEO tariffs. Each table also summarizes the percentage increase in each base distribution charge.
Table 1: DEO Current and Proposed Base Customer Service Charge
Table 2: DEO Current and Proposed Base Volumetric Charges
In addition to the base rate changes summarized above, DEO is seeking approval for the continuation and modification of a number of its existing riders including the Automated Meter Reading Cost Recovery Charge, Capital Expenditure Program Rider, Pipeline Infrastructure Replacement Program and Cost Recovery Charge, Tax Savings Credit Rider, and Transportation Migration Riders. DEO also proposes to increase to its Gross Receipts Tax Rider from 4.6044% to 4.98% and eliminate its Transportation Service for Schools rate schedule and its Transportation Surcredit Rider.
Please contact Katie Emling if you have any questions about DEO’s rate case application or how you may be impacted by the base distribution rate increases proposed by DEO.
Take Steps This Winter to Mitigate Your 2025 Transmission Costs
Eligible electric customers in American Electric Power (AEP), FirstEnergy (FE), and AES Ohio service can decrease transmission costs by implementing measures to reduce demand during certain days of the year when loads across a transmission zone peak, known as Transmission Coincident Peaks (Transmission CPs). Under transmission pilot programs, a customer is charged for transmission based on how the customer uses power during those hourly Transmission CPs. This is in comparison to the default method in which the customer pays for transmission based on its monthly billed demand.
For the 2025 calendar year, transmission charges for transmission pilot program customers will be calculated based on the customer’s demand during the Transmission CPs occurring during the 12 months ending October 31, 2024. Historically, Transmission CPs in FE and AES Ohio service territories have occurred exclusively during the summer months, however the single-hourly CP (1 CP) in the AEP Zone has also seen winter peaks.
Five times over the past 13 years, AEP’s 1 CP has occurred during the winter months, with 80% of those 1 CPs occurring during the hour ending (HE) 8:00 AM Eastern Standard Time (EST). The lone exception was on December 23, 2022 when the CP occurred during the HE 6:00 PM EST.
We recommend that AEP customers currently enrolled in AEP’s transmission pilot program take steps this winter to curtail load in response to potential Transmission CPs, especially during the HE 8:00 AM EST on potential 1 CP days.
To assist customers in their efforts to reduce demand during Transmission CPs, Brakey Energy has devised an alert notification system. This is a service available only to Brakey Energy clients. Participating clients can modify their registration preferences by emailing Catherine Nickoson.
Carolyn Brakey’s Campaign Update
The November election may be behind us, but Carolyn’s all-important March primary is fast approaching. Early voting is less than 100 days away. However, that’s not stopping Carolyn from hosting extended family at the Brakey home this Thanksgiving. Learn more in her campaign newsletter that went out today.
Picture 1: Carolyn, with her daughter, clutches a 25-pound turkey from Harvest Bell Farm in Newbury, OH.
The best offer we are currently seeing is from AEP Energy for 12 months at a rate of 5.75¢/kWh. With winter prices softening with mild weather, this represents a slight discount from the offer we highlighted last month.
Regarding natural gas, if you entered into a fixed-price residential natural gas contract that does not include an early termination fee, including the residential offers Brakey Energy highlighted prior to this past winter, you should seek to exit and either enter into a new agreement or default to the Standard Choice Offer (SCO).
Brakey Energy has long and often found defaulting to distribution utilities’ SCO a prudent strategy for natural gas supply. We encourage our readers to utilize this strategy if they are comfortable riding the highly volatile natural gas market – especially through the fall. To employ this strategy, you simply need to provide termination notice to your existing supplier and you will automatically be defaulted to the SCO.
Natural Gas Market Update
The NYMEX price for November settled at $3.164 per Million British Thermal Units (MMBtu) on October 27, 2023. This price is up 14.5% from October’s price of $2.764 per MMBtu. This settlement price is used to calculate November gas supply costs for customers that contract for a NYMEX-based index gas product.
The graph below shows the year-over-year monthly NYMEX settlement prices for 2019, 2020, 2021, 2022, and 2023 to-date. Prices shown are in dollars per MMBtu of natural gas.
Figure 1: NYMEX Monthly Natural Gas Settlement Prices
Figure 2 below shows the historical November 21, 2021 through November 21, 2023 Around the Clock (ATC) forward NYMEX natural gas prices in dollars per MMBtu for the balance of 2023 through the First Quarter of 2024 (labeled as “Custom Strip” in the graph below) and calendar years 2024, 2025, 2026, 2027, and 2028. Following a brief and modest increase in short term natural gas prices early this month as shown by the Custom Strip and Calendar Year 2024 graphs, natural gas prices through 2024 are trading under $3.50 per MMBtu. Prices for outlier years are hovering around $4.00 per MMBtu with prices for the 2028 calendar year trading slightly lower than other outlier years.
Figure 2: ATC Calendar Year NYMEX Natural Gas Prices
* Pricing courtesy of Direct Energy Business.
Electricity Market Update
Figure 3 below shows the historical November 21, 2021 – November 21, 2023 ATC forward power prices in dollars per Megawatt hour (MWh) for the balance of 2023 (labeled “Custom Strip” in the graph below) and calendar years 2024, 2025, 2026, 2027, and 2028 for the AD Hub. Forward prices for calendar years 2025 through 2028 are hovering between $46.00 to $48.00 per MWh and prices for calendar year 2024 are trading just south of $44.50 per MWh, which is a return to prices that calendar year was trading at in July 2023.
Figure 3: ATC Calendar Year Power Prices for the AD Hub
* Pricing courtesy of Direct Energy Business.
Calendar of Events
28TH ANNUAL OHIO ENERGY SAVINGS & MANAGEMENT CONFERENCE
Tuesday, February 27, 2024 – Wednesday, February 28, 2024
The Columbus Renaissance Hotel
50 North Third Street
Columbus, Ohio 43215
This is Ohio’s premier conference on energy rates, regulations, and efficiency. Make plans to attend this conference and receive priceless insights into energy prices, trends, savings opportunities, and the forces that influence the price and quality of energy in Ohio.
A complete agenda with a list of presentation topics, speakers, and times will be available on the event website by December 1, 2023.
Brakey Energy clients may have access to discounted – or even free – entries to the conference. Please contact Catherine Nickoson for more information.