Columbia Gas makes changes, opts for fair market pricing

Hannah Nusser and Hannah Nusser

In an attempt to save consumers money, Columbia Gas has introduced a new pricing system that allows it to distribute gas closer to market value.

A new pricing and purchasing system called the Standard Service Offer took effect this month. It concerns customers who buy their gas directly from Columbia Gas of Ohio. The company divided the state into six regions and held an auction Feb. 23 for third party gas providers to bid on the rights to provide Columbia’s gas for each region.

“The hope is that ultimately, putting gas up through auction drives the price down for natural gas, brings it truer to the actual market value and makes it most affordable for the consumer,” said Chris Kozak, Columbia Gas of Ohio Communications Manager. “Columbia Gas is like Federal Express — we just deliver the gas, we don’t make money on the sale of the gas.”

Dan DiSalle, Jr. of DiSalle Real Estate Co. said off-campus students will be affected in different ways, depending on where they live.

“It’s certainly at some point going to affect them — a landlord’s going to want to pass on this cost to someone, but it certainly hinges on how the property’s set up and how the lease is arranged,” DiSalle said.

If they’re living in a new apartment building, it would be metered and billed directly to them, he said, and if they’re sharing a house with roommates, the gas bill would be under one person’s name and likely be divided among roommates. For those with a gas expense fixed into their monthly rent, he said, the rate should comply with the lease agreement.

“I guess a lease could have a fancy little clause that said if charges go up we could charge the overage directly to you,” DiSalle said. “But it would have to be something contained in the lease that accounted for that.”

Deb Smith, Kroger customer service coordinator, said her gas bill has been locked in at a fixed rate for two years.

“I just got a letter in the mail … stating that we could choose another gas provider to go with … because at first I got [a letter] stating that the place I was going through was not an option anymore,” Smith said.

Smith said she plans on opting for a locked in, fixed rate.

“It’s a better way to go if you can get it low enough,” Smith said.

Changing gas providers takes just a phone call to Columbia Gas, Kozak said, but consumers should be aware of penalty charges for leaving their contracts with other providers early, among other factors that could cost more than they’re saving.

“You want to make sure you know all the parameters,” Kozak said. “This is your money, you want to make sure you do as much investigation before you spend it. It’s how much time you want to invest in it and how much savings you’re really going to see.”

With the Columbia Gas SSO, the price per cubic foot of natural gas will change every month based on the New York Mercantile Exchange price. However, there is a 19-cent affixed retail price added. For April, Columbia gas customers will pay 57 cents per cubic feet of natural gas they use, made up of the 19-cent fixed retail adder, and the NYMEX price of 38 cents. The NYMEX price for May will be determined on April 28.

Kozak said it is almost impossible to predict future natural gas prices.

“The biggest impact on natural gas prices are the weather,” Kozak said. “We don’t know what the weather’s going to be like … Are we going have four hurricanes in the Gulf of Mexico this hurricane season? We don’t know, but if we do, that’s going to drive the cost up of gas.”

Municipal Utilities Director Kevin Maynard said the Utilities Department can no longer price against Columbia Gas because of the pricing system switch. He said Municipal Utilities will offer to consumers a fixed rate option instead, which has its advantages.

“If the price of gas goes up on the market, they’ll still pay whatever the price ends up being when we lock it in … but if they ever see a better price that they want, they can get right out of the program and take it.”

Locking in a fixed price is a low risk option, Maynard said, because it can protect patrons from price increases and they can opt out of the program without penalty at any time.

A list of approved gas suppliers and a price comparison chart can be found at the Public Utilities Commission of Ohio Web site or the Ohio Consumers Counsel website.