Ohio moves closer to natural gas deregulation

Two utility companies will be allowed to eliminate regulated natural gas pricing for businesses in another step toward the deregulation of natural gas in Ohio.
Associated Press
Jan 12, 2013

 

The change only affects businesses, but not household customers, of Columbia Gas of Ohio and Dominion East Ohio Gas with some conditions.

The Public Utilities Commission of Ohio on Wednesday approved the change in a deal reached between independent suppliers, the utilities and the Ohio Consumers' Counsel.

Businesses will buy from independent suppliers that set whatever price the market bears instead of a price set by a state-supervised competitive auction.

Supporters of deregulation say the actions will lead to greater competition and lower prices. But opponents dispute it, saying that a few dominant suppliers no longer will have to compete with the regulated price.

Todd Snitchler, chairman of the utilities commission, said the change should benefit natural gas customers.

"The transition in Ohio into a more competitive and robust market provides the incentive for suppliers to provide consumers the best options available to them in terms of making a selection for their natural gas needs," said Todd Snitchler, chairman of the utilities commission.

Dominion East Ohio will be able to end regulated pricing for businesses beginning in April while Columbia Gas of Ohio must wait until April 2014.

Both companies would need to go through a series of regulatory hearings and formally file an application if they want to eliminate the standard price for household customers.

The Ohio Consumers' Counsel says it would be impossible for Dominion to make that change before 2016 and Columbia wouldn't be able to do it until 2017 at the earliest.

Raymond Frank, a Columbia Gas spokesman, told The (Cleveland) Plain Dealer that there will be no changes for its business customers unless at least 70 percent of them choose on their own to leave the utility's standard price.

Frank said about 40 percent of the business and industrial customers have chosen to deal with independent suppliers and about half the residential customers have left for contracts with an independent.

Jeff Murphy, Dominion's managing director for commercial operations, said the company hasn't decided whether to try to end the standard offer for residential customers.

He said about 80 percent of business and industry customers, particularly the largest customers, have left the utility's standard offer for contracts with independent suppliers.

 

Comments

luvblues2

Charge what you want when you want mentality.

Contango

Good to hear that the state wants to let the free market work.

coasterfan

What is most likely to happen is an increase in gas leaks and rising natural gas prices. Regulations were put in place to ensure that gas companies provide safeguards that they otherwise wouldn't provide. Does anyone actually think that they would put public safety on a higher pedestal than profits?

God Of Thunder

Uh...Yeah, I do believe public safety does come before profits.. I don't know how you can think that an increase of leaks can happen and rising proces.. Look back and research..Prices are at a 10 year low

coasterfan

The reason prices are at a 10-year low is due to the very things that deregulation will stop. You can believe what you want to believe. As for me, I've seen what deregulation does (see recent Wall Street, banking & housing crisis and BP Oil spill). It always helps the people who own the companies while we middle class folks suffer the consequences, each and every time.

Contango

coasterfan writes:

"It always helps the people who own the companies,"

Does your employer have a 401(k) and do you contribute?

Fracking is largely responsible for low nat-gas prices.

BW1's picture
BW1

"The reason prices are at a 10-year low is due to the very things that deregulation will stop. "

DEregulation will stop fracking? REALLY?

Reality knocked; you weren't home.

Contango

The level of financial and economic illiteracy in this country is pathetic.

Anyone who thinks that profit is dirty word must be an economically self-sufficient and self-sustaining volunteer.

ANY business without profit eventually goes outa business.

Sales minus taxes and expenses equals profit.

No profit = no employers = no jobs

Not-for-profit = not taxed.

For profit = taxed.

Who pays the wages and health and welfare benefits of the bureaucrat regulators?

The Big Dog's back

So what you are saying is to be a profitable company, you should not care about the air, water, ground?

Contango

derp

Really are you ...

So what they are really implying is that they want to base their prices on future consumption. Exactly like what big oil is doing. If that is the case, I want my million dollars right now. Because in the future I will earn it. We are too reliant on Dino-Technology.

luvblues2

Yeah, Yeah Yeah.. Knew a guy who left Chi-town in 1970 after he graduated from college. He didn't want to sign for the draft and went to Canada. His parents liquidated some of their funds and sent him to Amsterdam. He loves it there. He can smoke all the dope he wants and has no worries. What does he do for a living? He trades. He, just like Contango, believes in (GLD). Also, just like Contango, he holds pieces of paper that says he owns that gold. It sure ain't in his house. Now, if the economy and gov't fall apart, who will honor those papers? Think "Kelly's Heroes" starring Clint Eastwood.

Contango

@ luvblues2:

Successful investors like Geo. Soros and some hedgies like John Paulson own (GLD) - good enough for me.

Using it as a hedge against a credit or currency crisis not a new Dark Ages.

Besides, if the world econ and the gov't "fall apart," we'll ALL have much more to worry about than whether one owned gold physically or as an ETF.

eriemom

Regulations were put into place because the utility is a monopoly. The free market does not work freely when there is no competition.

Contango

And monopolies can only exist because of govt.

Govt. needs to encourage competition.

coasterfan

Exactly.

BW1's picture
BW1

It's no longer a monopoly - you can choose from a variety of suppliers.

KURTje

Another valid reason I don't mind making firewood. Big $$ & big egos. Leave them to their devices.

eriemom

The utility would not exist but for the government, us, that is true. We built the infrastructure that delivers all utilities. Competition for profit is destroying that infrastructure. We, the government, have the right to regulate our infrastructure.

Contango

No, "monopolies" don't exist without govt. protection.

"You didn't build that," eh?

Classic collectivist nonsensical rhetoric.

For one, the State did not build the nat-gas lines.

Without profit, capital for investment tends to dry up.

Better tell the state and federal employee pension funds not to seek out positive ROI.

coasterfan

Meanwhile, Contango's comments are classic conservative nonsensical rhetoric. Isn't it sad when we come across someone for whom ideology and a blind allegiance to runaway capitalism trumps all other viewpoints, regardless of how valid history has shown them to be?

Contango

@ coasterfan:

Not sure what brand of comic book "History" you're reading.

Tens of millions of people have suffered degradation, starvation and death due to centralized collectivist planning than ever have because of free market capitalism.

Besides, crony capitalism or corporatism is largely supported in this country by the Washington kleptocrats, not free market capitalism.

Certain "too-big-to-fail" financial institutions only exist in this country due to govt. protection.

Do you contribute to a 401(k) where you work? If so, in what is the capital invested?

Also, “profit” helps fund your salary, health care benefits and that co. vehicle you drive, plus any other employer paid perqs.

shucks

blah, blah, blah

OMG.LOL.WT_

Some would have us go back to the good old "robber baron" days.
robber baron
n.
1. One of the American industrial or financial magnates of the late 19th century who became wealthy by unethical means, such as questionable stock-market operations and exploitation of labor.
2. A feudal lord who robbed travelers passing through his domain.

Contango

Some would have us sing the praises of despots like Stalin, Hitler, Mao, Pol Pot, Chavez, Castro, et. al.

Heck, Chavez who destroyed his country's oil industry didn't even have to take the oath of office to remain Pres. - sweet!

OMG.LOL.WT_

Oh, did I strike a nerve? I'm sorry.
Are we limited to 2 choices, oligarchy or communism?

Contango

@ OMG.LOL.WT_:

Ever use a Carnegie library?

Contango

"A Fracking Proposal From a Texan":

http://online.wsj.com/article/SB...

KURTje

Or where I'm from...."I bought this farm." Most were liars. Be carfeul of those with much, because usally the are self-centered & greedy.