Ohio Natural Gas Regulations
· Three utilities (Columbia Gas of Ohio, Cincinnati Gas and Electric Company (now doing business as Duke Energy of Ohio) and East Ohio Gas Company (now doing business as Dominion East Ohio Gas)) in the State have had Choice programs underway since 1997, and a fourth company (Vectren Energy Delivery of Ohio) began its program in January 2003.
· As of December 2009, PUCO has certified 36 marketers as competitive retail Natural Gas Suppliers for residential and small commercial customers and 15 marketers are actively serving residential customers.
· The standard service offer (SSO) rate varies from month to month, much like the gas cost recovery rate it replaced. According to the Office of the Ohio Consumers' Counsel, a typical customer saved $100 per year as a result of the bidding process in the first auction.
· PUCO gives final approval of wholesale auction process for Columbia Gas. The company will stop buying gas through individual contracts with producers and instead hold annual auctions in which suppliers can compete for the ability to provide gas to Columbia. The auctions will establish a market-based rate, called a standard service offer (SSO). Customers can choose the SSO service or Columbia's choice program.The first auction will purchase gas for April 2010 to April 2011 and the second one for April 2011 tso April 2012. A third set of auctions will be held in 2012 to establish a standard choice offer (SCO) rate in which a customer's bill will identify the supplier. The company will establish a new charge to recover the costs of the transition to the market-based auction structure.
· Phase two of Dominion's restructuring plan began in April 2009. The company held two auctions in February 2009 to purchase supplies for April 2009 through March 2010. One auction established a new SSO for low-income or choice-ineligible customers and the other set a standard choice offer (SCO) rate for choice-eligible customers. The SCO rate changes monthly based on the NYMEX month-end settlement price, plus a set fee of $1.40 per Mcf. Another round of auctions will be held in February 2010 for the period April 2010 through March 2011. PUCO must approve all auction results and reserves the right to terminate the pilot at any time.
· At the end of phase two, if approved by PUCO, Dominion would eliminate all sales services and become a "pipes-only company" but continue its role as the provider of last resort. The company would continue to be responsible for the distribution of Natural Gas as well as billing, reading meters, and maintaining pipelines. Remaining sales customers would either buy gas from a marketer of their choice, join a government aggregation buying group, or be assigned to participating marketers on a pro rata basis.
· Columbia Gas Company of Ohio and Vectren Energy Delivery have also received PUCO permission to eliminate their gas cost recovery rate and replace it with an SSO, established through a wholesale auction process.
· Ohio consumers can also purchase natural gas through an aggregated group. The State allows communities and organizations such as churches, schools, and membership-based groups to purchase natural gas through aggregation programs where the residents and businesses form buying pools to obtain better price deals. Local governments may choose an “opt-in” or “opt-out” form of aggregation. The opt-in program requires that customers sign up if they wish to participate, while the opt-out program includes all customers in the community unless they choose not to participate. In either case, the local governments must adopt an ordinance or resolution to create the programs. The opt-out programs must be approved by ballot at a primary or general election. According to the Ohio Consumers’ Counsel, more than 190 Ohio communities have approved aggregation programs, including the 126 communities that are part of the Northeast Ohio Public Energy Council (NOPEC). According to its web site, NOPEC is the largest public aggregation in the country with more than 600,000 potential customers. Customers already enrolled in choice programs are not included in aggregation programs unless they ask to join.
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