Last week, I received another call from a natural gas telemarketer. I typically allow the telemarketer to give me his or her sales pitch to see what MICA members are receiving for calls. I was alarmed at some of the misinformation this caller was providing me.

To begin with, she was indicating to me that they have a great “fixed” price of $11 per Mcf. I told her that their price was in fact higher than Dominion East Ohio Gas’s (DEOG) price. (As you will see in the Apple-to-Apples PUCO calculation below, to break even with DEOG’s present rate, their price would have to be $8.39/Mcf.) She said DEOG’s price was $13/Mcf and would be going higher each and every month! In fact, DEOG’s February Standard Service Offer (SSO) price is $8.612/Mcf and might be lower in the spring. Let’s take a look at a comparison.

Comparing apples to apples

The reality for DEOG’s costs is:

· Their SSO for February ($8.612/Mcf), plus

· 40 cents for the state excise tax (4.89%), plus

· DEOG’s transportation cost of about $2.97/Mcf.

That would bring me to about $12/Mcf, not $13/Mcf.

To truly compare apples to apples, I would have to take:

· Her “fixed” price of $11/Mcf,

· Add sales tax (7.75%) of around 85 cents, and

· Add DEOG transportation of $2.97/Mcf.

The marketer’s total costs are now close to $15/Mcf!

As we head into spring, DEOG prices should begin to fall. So why would I want to pay $15/Mcf when DEOG’s current total price is $12/Mcf and might be less than $10/Mcf in April or May?

Beware

This telemarketer was seriously misinformed. Unfortunately, if I had been a less knowledgeable DEOG customer, I might have seen my natural gas costs jump up 22%. If I later tried to get out of the contract, it would cost me $25 to $50!

I asked her if I could speak to her manager because, in my opinion she and her company were providing bad information to me and others. The telemarketer indicated I would have to call back to a different number. When I asked her for the number, she mumbled something I could not understand. When I asked her to repeat the number, the line went dead. The bad news is that she is probably still making similar calls to unsuspecting natural gas customers.

Please be very careful when dealing with natural gas telemarketers. Like myself, many MICA member’s contracts with MX Energy will be expiring this summer. As I have for the last six years, I will keep my readers informed if any attractive natural gas deals come along. If nothing excites me (for example, a fixed multi-year rate of $9.50 or less), I might just default back to DEOG until the right deal comes along.

Sincerely,

Michael Brakey

President

Brakey Consulting, Inc.

(216) 751-1758

PS: I went to the PUCO website and compared DEOG’s cost to this telemarketer’s quote of $11/Mcf. The results are shown below. To break even with DEOG’s variable rate price today, the marketer would have had to sell natural gas at $8.39/Mcf.