The NYMEX settlement price at the end of December was $3.084 per thousand cubic feet (Mcf), down 8% from $3.364 at the end of November. For Dominion East Ohio commercial and residential customers under Choice, the price to beat is NYMEX plus $1, or $4.084 per Mcf beginning in mid-January. For more information, you may read John Funk’s article from the January 4th Plain Dealer: Dominion, Columbia rates lowest in decade
In recent years, the Plain Dealer’s John Funk has written a number of articles on residential and small commercial natural gas prices. John’s most recent article from Sunday, December 25 is How to choose the best natural gas contract. Commodity prices of natural gas haven’t been this low in a decade. We have recommended that Dominion East Ohio (DEO) customers stay with the variable Standard Choice Offer (SCO) rate, if they have not selected another supplier. If a customer had already contracted with a supplier at a higher rate, we recommended that the customer cancel and default back to DEO if there was not a significant penalty charged by the supplier. In fact, this is what I did for my Cleveland area home. I regret that I didn’t recall the information in John Funk’s September 4, 2010 article, Dominion East Ohio Gas switches some customers to high-priced suppliers. The reason I mention this is because for the last two months I became one of the customers that was bumped to a higher-priced supplier. If I had recalled the article, I could have maximized my natural gas savings in recent months by making a simple phone call to DEO specifically requesting to be returned to the least expensive variable program, the SCO. When I defaulted back to DEO’s variable program last September, I was returned to a different program called Standard Service Offer (SSO). Like the SCO, the pricing formula was identical for two months - the NYMEX settlement price at the end of each month plus a dollar per Mcf. What I did not recall was that, after two months under the SSO, my account was handed over to a higher priced marketer under the Monthly Variable Rate (MVR) program. The particular marketer that I was assigned used a pricing formula of the NYMEX settlement price each month plus $1.75 per Mcf, as opposed to $1.00. Summary: If your intention is to default to DEO’s variable program, examine your natural gas bill closely. Make certain that you are on the Standard Choice Offer (SCO) program as opposed to the Standard Service Offer (SSO) or the Monthly Variable Rate (MVR). If you are on the MVR program ask your supplier what formula they are using. If it is not NYMEX plus $1/Mcf or less, contact DEO and request to be returned to the SCO program. Mike Brakey
FirstEnergy passes on the costs associated with Ohio’s energy efficiency mandates to their customers through a charge called the DSE2 charge. FirstEnergy recently announced their new DSE2 rates that will take effect on January 1, 2012. The current and new rates in cents per kilowatt hour, by utility and rate schedule, are summarized in the table below (table no longer available).
If the rates for your rate schedule are increasing and you are a “mercantile” customer, it is now even more important to see if you can qualify for exemption from the energy efficiency charges. Contact us if you have any questions about your situation.
Brakey Energy is proud to work with many McDonald’s franchise owners in northern Ohio on energy management strategies. One of those owners was featured in this article in the November 17th issue of the Sun Press: After 53 years, Karos is still lovin’ it.
The NYMEX settlement price at the end of October was $3.524 per thousand cubic feet (Mcf), down 6% from $3.759 at the end of September. For Dominion East Ohio commercial and residential customers, this means that the default price to beat will be $4.524 per Mcf for the month beginning in mid-November. Columbia Gas of Ohio’s price to beat in November is $0.5404 per hundred cubic feet (Ccf). You may read more about this in John Funk’s article in the Plain Dealer: Dominion and Columbia customers will see gas prices fall in November
After years of increases, natural gas prices have been falling primarily due to the increase in supplies as a result of breakthroughs in shale drilling technology. The NYMEX settlement price at the end of September was $3.759 per thousand cubic feet (Mcf), down from $3.857 at the end of August. For Dominion East Ohio (DEO) commercial and residential customers under Choice, the price to beat is NYMEX plus $1, or $4.759 in October. If you are willing to take a little risk, we are recommending that these customers stay with the utility’s default variable rate plan for now because this is likely to save you money this winter over the fixed price plans that are currently available. The lowest fixed price offer for DEO customers that we saw on the PUCO’s Apples to Apples Chart was Constellation NewEnergy’s $5.99 per Mcf for 12 months. If you are risk-averse, you might check and see if your community has a lower fixed rate plan. For more details, see this John Funk article from Tuesday’s Plain Dealer: Natural gas prices falling as supplies near a record
AEP-Ohio’s electric rates include a Provider of Last Resort (POLR) charge that was intended to compensate AEP for the risk of both customer migration to retail electric suppliers and customers returning to AEP for generation services. Several parties, including the Industrial Energy Users – Ohio, challenged this charge in court. In April, the Ohio Supreme Court directed the Public Utilities Commission of Ohio (PUCO) to reconsider the appropriateness of the POLR charge. The PUCO recently determined that the POLR charges are not appropriate. The PUCO directed AEP to refund the amount of POLR charges collected since June of 2011 by credits on customer bills beginning in November. You may read more about this in this article from the Columbus Dispatch: Credits coming for AEP customers
On Wednesday, September 28th, we attended and participated in the 6thAnnual Northern Ohio Energy Management Conference in Akron. The luncheon keynote address was given by Tony Banks, Vice President Competitive Market Policies for FirstEnergy Solutions. He commented that:
- The deregulation of electric utilities that began in 1999 in Ohio has resulted in competition that is working.
- About 1.6 million residential and business customers are buying generation from competitive suppliers and finding cost savings.
- FirstEnergy customers have saved over $100 million annually.
- AEP-Ohio’s current rate proposal includes hurdles to generation shopping that, if approved by the PUCO, would limit competition for their customers
John Funk had an interesting article in Thursday’s Plain Dealer about Tony Bank’s speech: FirstEnergy exec says utilties’ competition has lowered costs. Mr. Funk states that “…the 70 percent who are taking advantage of competition to get a lower price are buying from FirstEnergy Solutions. They get a 6 percent discount on the price of power charged by CEI, Ohio Edison and Toledo Edison”. However, our experience has been better:
- We have helped our commercial and industrial clients contract about 180 accounts with FirstEnergy Solutions. Over the past 12 months, their average savings were 13% off the entire electric bill as opposed to a 6% discount off the generation portion of the bill!
- We have a few clients who have contracted with other generation suppliers, such as Constellation NewEnergy, Duke Energy Retail and Glacial Energy. However, these suppliers were not ready to go when competition fully opened up in 2009. In addition, the terms of their contracts are not right for every customer.
These savings have helped our clients, who are served by FirstEnergy’s distribution utilities, reduce their electric costs and remain competitive in the global marketplace. We expect to have the same success with companies who are served by AEP-Ohio, depending upon the outcome of AEP’s rate proposal.
Mike Brakey will be attending Governor Kasich’s Energy & Economic Summit in Columbus, Ohio on September 21 and 22. Mike believes that it is good whenever Ohio businesses become more energy efficient, but he is hoping to get rid of Ohio’s renewable energy mandates that don’t make economic sense at this time. John Funk had an interesting article in Saturday’s Plain Dealer that mentioned not only the energy summit, but also a recent survey of Ohio voters about energy policy: Poll: Ohioans support energy-efficient products
AEP-Ohio has proposed new rate plans to be effective on January 1, 2012. We have been following the ongoing settlement talks regarding thses proposals. The Columbus Dispatch had a recent article with an update on the case: AEP’s Plan
For many years, the standard rates offered by AEP’s two Ohio utilities, Columbus Southern Power and Ohio Power, were lower than market rates. The opportunities to switch to a retail electric supplier and save money have been limited. A key issue with AEP’s rate proposal is that it is trying to limit the savings opportunities going forward while also raising rates. IEU-Ohio and other stakeholders are working to make sure that AEP customers have the opportunity to select an alternative electric supplier, as required by Ohio law.