Gas Choice Allows Consumers to Compare Prices

February 21, 2011

Misc. Topics

The following article is from a “Law You Can Use” column provided by the Ohio State Bar Association (OSBA). It was prepared by the Office of the Ohio Consumers’ Counsel in Columbus:

Q:  What is natural gas choice?
A: Natural gas choice is the result of voluntary programs developed by four investor-owned Ohio natural gas companies:  Dominion East Ohio, Columbia Gas of Ohio, Duke Energy and Vectren Energy Delivery of Ohio.  Gas choice allows customers to select an independent natural gas supplier, participate in a community buying pool (aggregation) or continue to purchase gas from the local natural gas company.  As a result of choice programs, consumers can shop and compare prices for natural gas, just as they would for any other good or service.

Q: If a customer chooses a natural gas supplier, will he or she still be a customer of the local gas company?
A: Yes.  If a customer chooses a new gas supplier, the local gas company will still deliver the gas to his or her home, continue to read the meter, assist the customer with billing of the local company’s charges and respond to emergencies.

Q:  How can a customer begin to explore options?  Is there a deadline for making a decision?
A: Customers can choose a supplier at any time, but should first learn about the natural gas choice program and consider available options.  In order to make an informed decision, consumers should comparison shop.  Questions to ask each supplier can include:

• Is there a fee to sign up?

• For what period of time am I obligated to stay with a supplier?

• Can I cancel my agreement with the supplier at any time? If so, is there a
cancellation fee?

• How much will I pay for natural gas from a supplier?

• What will I pay for gas if I stay with the local gas company?  When will
this rate change?

• What kind of rate is the supplier offering? Is it a fixed rate for the contracted agreement period? If the rate is variable, how often will it change and   what factors will determine the rate?

Q:  What if a customer decides not to participate in gas choice?
A: Customer who choose not to purchase natural gas from particular supplier will continue to receive their natural gas from their local gas company at the utility’s current rate.  That rate may be either the Standard Choice Offer (for Columbia customers) or the Gas Cost Recovery rate (for Duke Energy customers).  These rates account for approximately two-thirds of a customer’s monthly bill and change each month based on the monthly wholesale price of natural gas listed on the New York Mercantile Exchange.

Q: Will a customer save money by participating in gas choice?
A: Gas choice programs allow customers to seek opportunities to save money by locking into a fixed rate for a period of time and suppliers to promote competitive offers in hopes of attracting new customers.  This does not guarantee that customers will realize savings by choosing to purchase natural gas from a supplier.  Many factors, including weather, gas demand and gas production, impact the price of natural gas.  It is important for customers to research available offers to determine the choice offer that best suits their individual needs.

Q: Can local governments create buying pools and negotiate an offer to supply natural gas to customers in their community?
A: Yes.  Legislation passed by the Ohio General Assembly and signed into law in 2001 authorizes local governments individually, or in conjunction with other local governments, to aggregate their constituents for the purchase of natural gas.  Affinity groups, such as trade associations and professional groups, may also form buying pools to purchase natural gas.

Q:  Who can provide residential customers with more information about natural gas choice?
A: The Office of the Ohio Consumers’ Counsel (OCC), the residential utility consumer advocate, can provide consumers with detailed information about the gas choice programs available to customers of Columbia Gas of Ohio, Dominion East Ohio, Duke Energy and Vectren Energy. The OCC’s “Comparing Your Energy Choices” fact sheets provide weekly updates to suppliers’ natural gas offers.  This information also includes the types (fixed or variable) of rates offered, contract length, as well as contact information for suppliers in each utility’s respective coverage area of Ohio.

To obtain free copies of “Comparing Your Energy Choices” or for additional information about choosing a natural gas supplier, contact the Office of the Ohio Consumers’ Counsel toll free at 1-877-PICKOCC (1-877-742-5622) or visit www.pickocc.org.

For more information about Consumer Choices and Consumer Products, please contact us at 1-800-297-9191 or visit our website at www.slaterzurz.com.

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About slaterzurz

Slater & Zurz LLP is an Ohio law firm of highly experienced and respected attorneys. Over the last 40 years, we have developed a reputation for getting positive results for clients. We've been trusted with handling over 20,000 personal injury cases and our clients have received more than $120,000,000.

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