Let me start by saying I know this natural gas stuff is confusing. I’ve done my best to educate and inform readers with step-by-step instructions of what I do and laying out the other options.
If you missed the original coverage back in September or several updates I’ve had since, you can find all of my stories and columns online at www.ohio.com/betty where there’s an “Energy/Natural gas” box that will take you right to the stories.
If you don’t have Internet access, you can see a copy at the local library of the Sept. 4 article (remember the pricing on the other offers has most likely changed by now) and the most recent updates of Oct. 9 and Oct. 16 to catch up.
By the calls and emails I’m getting, it seems a good idea to review your options. I apologize if I sound a little bit like a school teacher in trying to drill the same message again.
Life is busy for everyone. You might have read my big annual comparison of gas supplier and prices with the chart in September. Maybe you had good intensions to do something about it, but you never got around to making the switch.
Or maybe you did switch, but there’s still confusion.
There are even some people who followed exactly what I suggested but while you’re waiting for the switch to take place, you’ve gotten stuck with some unfavorable rates from your existing provider.
So let’s try to settle a few things.
I still have not changed my mind for this year and, so far, the decision to go with what is called the Standard Choice Offer (SCO), or the monthly variable as provided by a company randomly assigned by Dominion East Ohio, is looking like it will remain a good choice.
Remember, the SCO is the state-approved formula of the New York Mercantile Exchange (NYMEX) settlement price from the previous month plus what is called an “adder” of $1 per thousand cubic feet (mcf).
We list the monthly SCO price in a news brief in the Beacon Journal business section usually within the first week of the month.
That price has continued to drop from $4.86/mcf in September to $4.76/mcf in October to the current $4.52/mcf for November, so it has seemed like a good choice so far this winter. My hope is that it will continue to go down or remain stable. So far, it has far outpaced the fixed prices offered by marketers since their premiums are still high.
In comparison, fixed rates on the Public Utilities Commission of Ohio website are ranging from $5.67/mcf to $6.59/mcf.
And again, as a review: If you want to go with the SCO, you will need to either cancel directly with your provider or call Dominion East Ohio.
Tell them you want to cancel your current provider and move to what is called Standard Service Offer (SSO) for the first two months and then the SCO in the third month (they are the same price).
If you don’t request the SCO, by the third month, you could be charged the provider’s monthly variable rate, which is not based on the state-approved formula. But be sure you know whether there are cancellation fees with your existing provider. In most cases, it will be worth your while to pay the cancellation fee to get to a cheaper rate.
Expired/renewed contracts
Some of the confusion among readers seems to be they mistakenly thought that if they previously had a six-month or one-year contract with a provider and they fulfilled that contract, they are no longer under contract with that provider. That is not true. According to the PUCO, all marketers must send a renewal notice at least 45 days before the contract is to expire outlining the new rate and whether there is a cancellation fee. If there is more than a $25 cancellation fee upon renewal, there are extra steps the marketer must take.
But the marketers are allowed to automatically renew a customer to a new contract if they do not hear otherwise.
That’s where I think a lot of the issues have occurred. The question becomes whether the consumer read the letter and didn’t get around to calling to cancel or whether the consumer even saw the letter or mistook it for junk mail and tossed it.
I’ve had a handful of calls and emails from readers who were surprised that they were automatically renewed on their previous MXenergy contracts.
MXenergy’s David Fargnoli said the company sent two notices to customers before renewing them if the company was not notified.
In the case of Direct Energy, customers who did nothing were automatically renewed in a contract with a monthly variable rate, as the company was allowed. But some customers became angry after being charged $8.99/mcf and one said it went above $9/mcf on a monthly variable during the one-month to two-month switchover period.
Direct Energy spokeswoman Bethany Ruhe said the company encourages people to shop around. Ruhe said the cheaper monthly price is for customers who have specifically chosen the monthly variable plan throughout the year and that the company goes out and buys the natural gas in bulk for those customers.
Customers who are automatically renewed are getting the company’s monthly variable plan based on market conditions, so that’s why it’s more expensive.
Ruhe said the company has no cancellation fees for any of its contracts.
While I give the company credit for eliminating cancellation fees, I still take issue with it charging some people nearly double what I would consider the market rate, or the SCO.
PUCO spokesman Matt Butler said there are no rules that limit what a company can charge on its renewal or new rates.
So, it’s important to look closely at your bills and make sure you know what’s going on with your rate. If you don’t know, call the company that is listed on your bill. A reminder: Just because your bill comes from Dominion, does not mean your supplier is Dominion. There is a part on your bill that lists the company you are with and the phone number or you can also call Dominion, and their number is on the upper right of your bill.
Lastly, another word about government aggregations. I have said before that there are a lot of community-buying groups, called aggregations, which negotiate a rate for members of the community.
People who have not chosen their own provider will automatically get included in an aggregation and switched unless they “opt out” or say they don’t want the offer. (Again, this is another important reason to watch your mail. If you actively chose the SCO, you theoretically didn’t choose a provider so you will be included in the aggregation unless you opt out.)
For aggregations, sometimes the rates are competitive and better than what you can get on your own and sometimes they’re not. Sometimes they might not be what you want, if it’s a fixed price and you want a variable.
This week, Summit County locked in a rate of $5.57/mcf from February 2012 through January 2014 for its aggregation program for residents in townships. The price can’t go above $6/mcf and there is also a 10 percent discount for seniors.
This does not mean that you have to take this offer. The fixed rate is competitive and lower than public fixed offers, but that is only if you want to go with a fixed rate. The SCO this month is still more than $1/mcf cheaper. Also, keep in mind that the rate doesn’t start until February.
Betty Lin-Fisher can be reached at 330-996-3724 or blinfisher@thebeaconjournal.com. Follow her on Twitter at www.twitter.com/blinfisher and see all her stories at www.ohio.com/betty
