You are here

 

Save Money: Natural Gas Auction Results are Good News for Ohio Consumers

Ohio Energy Auctions Are Providing Record Low Prices
In Ohio, Columbia Gas, Dominion, and Vectren Energy offer an affordable Standard Choice Offer (SCO) for the gas supply portion of customer bills. Duke Energy Ohio supplies natural gas where the price is determined through a Gas Cost Recovery rate on customer bills. The Standard Choice Offer for gas supply is set by fiercely competitive auctions where many suppliers bid to supply the gas for customers who select their utility’s Standard Choice Offer

This year’s auctions to determine the Standard Choice Offer price have set record lows. Columbia Gas’ January auction set a record low adder of $0.107 per cubic foot (Ccf) and Vectren’s auction set an even lower record at $0.075 per Ccf. The bidders in February’s Dominion gas auction drove its adder to an even lower $0.015 per ccf. An adder is the delivery charge component which is added to the wholesale price of natural gas to set the Standard Choice Offer price. These record low adders combined with the currently low wholesale market price of natural gas are providing very low prices for the gas supply of customers who select the Standard Choice Offer. The US Energy Information Agency expects natural gas prices to remain low for many years to come.

"Choosing to buy natural gas through the utility’s Standard Choice Offer often provides the best price available for natural gas supply."​

The Value of the Utility’s Standard Choice Offer
Standard Choice Offers from Ohio gas utilities continue to be close to wholesale prices and are a conservative option that gives consumers the benefit of a highly competitive market price for the supply of natural gas. Customers who remain on the competitive Standard Choice Offer can avoid having to sort through the risks, challenges and uncertainty of door-to-door sales and telemarketing offers from energy marketers. Choosing to get natural gas through the gas utility via the Standard Choice Offer often provides the best price available for natural gas supply.

"Considering offers from an energy marketer may be risky for many consumers."​

The Risks of Marketer Offers
Considering offers from an energy marketer can be risky for many consumers. OCC advises consumers who are considering an energy marketer to take the time to carefully research and compare prices charged by marketers with the prices charged on the gas utility Standard Choice Offer over time. If the marketer price is not guaranteed to be lower than the Standard Choice Offer, most consumers will pay higher natural gas bills than necessary.

Additionally, consumers need to be aware of additional marketer charges such as early termination fees (ETF) and monthly service fees that can drive up their natural gas costs. Finally, consumers who choose a marketer offer need to diligently track contract ending dates to avoid letting marketer contracts automatically renew after the initial term to a monthly variable rate with higher prices. OCC has found that many consumers are not aware that marketer contracts may automatically renew to a higher monthly variable rate that can be more than twice the price of the utility’s Standard Choice Offer.

Enrolling with an energy marketer frequently results in a higher rate in the long run. In fact, data from Columbia Gas, for example, shows that from 1997 to March of 2020, Ohioans who chose a marketer paid about $1.8 billion more than those who remained on the utility’s competitive Standard Choice Offer.

Government Aggregation is Available to Some Ohioans
Government aggregation, available in some areas, is another option to obtain competitive prices for natural gas. Under government aggregation, communities can authorize the local government through an election to supply natural gas to their residents. Governments can use the buying power of purchasing natural gas for a larger pool of customers to offer competitive prices.

"Consumers can contact their utility to request to be switched from a marketer’s service to the Standard Choice Offer."​

How to Select the Utility’s Standard Choice Offer​
Consumers can confirm that they are on the Standard Choice Offer by contacting their utility or by checking for the notation of “SCO” on their natural gas bills. Some SCOs listed on the bill may also show the name of a supplier who won the opportunity to supply the gas through the auction. The supplier name may or may not be different than the supplier that previously appeared on the bill. However, each customer who chooses the Standard Choice Offer will pay the same monthly rate as other Standard Choice Offer customers no matter who their supplier is.

Consumers can contact their utility to request to be switched from a marketer’s service to the Standard Choice Offer. Customers enrolled with an energy marketer should check their contract or contact their marketer to inquire about any early-termination fees. If consumers are on a local utility’s budget billing plan, they should contact the marketer for more information about their options.

Learn more about Natural Gas Service in Ohio by visiting OCC’s Natural Gas web page at www.occ.ohio.gov/naturalgas.

Consumers may also wish to visit a website (Ohio Energy Choice) from the Public Utilities Commission of Ohio. This site provides historical Standard Choice Offer rates and is helpful in comparing prices over time. energychoice.ohio.gov/ApplesToApplesCategory.aspx?Category=NaturalGas#