Columbia Gas customers paid more after choice

Consumers in Columbia Gas of Ohio territory have paid more, not less, since being offered a choice of natural-gas carriers under utility deregulation, a newspaper reported Sunday.
Associated Press
Nov 12, 2012

The Columbus Dispatch reported (http://bit.ly/Q5BImD ) that newly disclosed data showed that those who selected their own gas provider paid a combined $885 million more since 1997 by shopping than they would have by sticking with regulated prices. Ohio's gas choice program was launched in 1997.

The data was released last week in a regulatory case before the Public Utilities Commission of Ohio that could lead to regulated prices being abolished. The comparison data covers the period from April 1997 to September 2012.

Customers fared best in the late 1990s, when the concept of choosing a provider was new, the report said. Many people chose fixed-rate gas contracts as an alternative to Columbia's variable rate. But over time, as the market developed, customers did worse.

Consumer advocates said the figures showed consumers haven't had enough information to make smart decisions.

"You have to wonder whether the whole setup is ever going to be able to deliver the kinds of benefits for customers that were promised," said Dayton-area attorney Ellis Jacobs, who represents utility consumers.

Deregulation supporters said the figures don't reflect how competition drove down even regulated prices and don't take into account the special products, such as fixed-rate gas contracts, that aren't available at regulated prices.

"Aggregating the number does not give the whole picture," said Bethany Ruhe, a spokeswoman for Houston-based Direct Energy.

Customers "have literally saved hundreds of millions of dollars ... because of the existence of the competitive market," said Vince Parisi, general counsel for IGS Energy in Dublin.

Both Direct Energy and IGS market unregulated gas contracts in Columbia territory.

Columbia spokesman Ken Stammen said customers are still responsible for making good decisions in a competitive marketplace.

"?Choice offers the opportunity of savings but not the guarantee of savings," he said.

Ohio State University energy economist Matthew Lewis said consumers might choose options that aren't in their financial interest out of fear of price increases or complacency.

According to the PUCO, about 40 percent of Columbia's 1.3 million residential and business customers are on "choice" contracts. The rest either pay the regulated price or receive low-income assistance. All Columbia customers paid regulated prices before 1997.

Clarence Rogers Jr. of Cleveland, a PUCO board member from 2001 to 2006, said the new figures should be of concern to Ohio regulators.

"The general belief was that customers would save money," he said.

 

Comments

Centauri

Do not believe everything that you get in the mail, read in newspapers and magazines or see on television or the internet. You have to seek and dig for the truth. Let the consumer beware. If it sounds too good to be true, it is not.

ladydye_5

I did NOT have an option. Our area is now on a "choice" plan without my consent. I got a letter that stated either I could choose one or one would be chosen for me. They also do not tell you that if you use another supplier you pay SALES TAX on the gas you receive.

totallyamazed

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It's best to compare before you sign, for sure. I received an offer this year from a provider that had a variable rate program. Their present rate was higher than the fixed rate I currently have, yeah that's not heppening. Ouch, glad I'm I skeptic.
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CAST THE FIRST STONE

you fools think our prez green issues will save us. bend over we r in trouble with energy rules that are coming.

buckeye15

So let's see here. Republicans are always saying "regulations are killing us. We need less regulation". So they deregulate this industry, and consumers take a soaking....and you blame it on Obama. Huh?

Centauri

I really love how others contribute to the forums. The more that contribute, the better for all.

man_on_the_street

"Under my plan, energy prices would necessarily skyrocket..." Obama 2008

God Of Thunder

Know the market, read the fine print, and research before you sign anything.. The energy market market is very volatile, and yes, you did have an option with your area "Choice" program. There is an opt-out form to sign, I did. I have never switched to the "Choice" program, I have watched thre whole thing, and we have made out pretty good..

ladydye_5

I read the fine print. I read everything. I even CALLED Columbia Gas. Only option I had was to pick my own or they would pick it for me

God Of Thunder

Yes..With the new SCO, they pick it, based on an auction type price, and it's still better than any marketer from the 'Choice' program... In my opinion

KURTje

Another souless organization? Why I try to do for my household as much as I can. (mostly wood heat/ some propane)

SamAdams

It's not the cost per ccf that's at issue for me, but rather Columbia Gas jacking up the bills (significantly) to cover "infrastructure." Oh, I get that they need to maintain the gas lines, but they had to do that BEFORE choice, too!

In the summer, my gas bills are negligible. Those summer rates have more than DOUBLED in the last year or two despite the fact my gas consumption has remained the same or gone down. A friend of mine, who actually turns the gas OFF in the summer, pays the same thing I do all summer long because that's apparently a Columbia Gas "minimum."

I have no objection to corporate profit. That's why businesses go into business in the first place, isn't it? Where I DO start to have objections is when I see things like this that I frankly consider price gouging.

Darwin's choice

Thank You PUCO !