I intended for today’s column to be a pretty routine check-up for those of us who have been on the Dominion Energy Ohio Standard Choice Offer or SCO for our natural gas for quite some time.
I have been recommending the SCO, a monthly variable price based on wholesale markets, for many years — ever since prices started dropping after our region started benefitting from the abundant shale gas supply and we're no longer reliant on the natural gas from near the Gulf of Mexico and its huge price swings with hurricanes.
The SCO has been pretty steady for several years — hovering in the $2 to $3 per thousand cubic feet (mcf) range and sometimes even dipping to the low $1/mcf range. The price is a monthly variable, which means it could go up and down. But it is based on a state-approved formula that is bringing prices to basically wholesale rates.
There is some recent volatility in the market going into this winter, according to Jeff Murphy, Dominion's vice president of regulation for the state of Ohio. December futures prices roses nearly 75 cents to $4.80 and then a day after dropped 80 cents. It was the largest one-day swing since 2009.
Murphy shared these observations with me about two weeks ago during our "final" conversation/analysis call before he retires at the end of this month after 32 years with Dominion. Murphy worked his way up the ranks of Dominion, ultimately serving as the head of Ohio’s operations as well as several other states before last year stepping back into his current role. He and his wife plan to get move involved with their church and other opportunities in the Akron area.
He put the current volatility in perspective.
“Even at some of those elevated levels, prices are still pretty low compared to historical levels,” he said, agreeing that the SCO was still competitive.
But I was still surprised to learn this week that the SCO rate for December, beginning on Dec. 13 will rise to $4.79/mcf from $3.26/mcf in October.
Before you start panicking, let’s continue to put this in some perspective.
According to Dominion, the SCO increase means an increase on the average bill from November to December of $15 — or roughly $17 compared to a year ago. We have been enjoying mostly swings of only a few cents or half a dollar and savings on our natural gas for quite some time, so hopefully this volatility is temporary. And these prices are still low compared to historical prices over the last 20 years.
There were other winters when the SCO price went up to the $5 to $6 and beyond range. We often forget that during the days before we started benefitting from the shale gas production in Ohio, we were reliant on the natural gas near the Gulf of Mexico and bad hurricanes sometimes took us to prices in the $12 and $16/mcf range.
The highest SCO was in July 2008 at $14.55/mcf and there was also a previous high of $13.78/mcf in November 2005.
The lowest price was $1.73/mcf in March 2016.
While I understand some people may want to find a fixed rate or choose something else, I’m willing to ride it out with the SCO and re-evaluate whether I need to make another decision. I also wouldn’t want to lock in now at a high price.
If you need a detailed step-by-step guide on how to choose the SCO, you can go to www.tinyurl.com/natgasbetty for the column I update each month with details. You can also call Dominion at 800-362-7557 and ask for the SCO and it will take up to two months to switch.
My column will also give some details about electricity pricing, which isn’t as easy to choose as the SCO. Most communities are on aggregations, or bulk buying, and you can remain there to get some savings.
You can also shop around for public offers for both natural gas and electricity by going to the Public Utiltiies Commission of Ohio’s website, www.energychoice.ohio.gov or calling 800-686-7826 and asking for an Apples to Apples chart to be mailed to you.
Beacon Journal consumer columnist and medical reporter Betty Lin-Fisher can be reached at 330-996-3724 or email@example.com. Follow her @blinfisherABJ on Twitter or www.facebook.com/BettyLinFisherABJ and see all her stories at www.ohio.com/betty