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Ohio Natural Gas Utility Changing Service Plans in 2012

Ohio’’s largest natural gas utility will change the way it prices natural gas for some customers starting this year.

Columbia Gas of Ohio said in an email to suppliers that natural gas customers who have not selected an alternative supplier through the utility’s Customer CHOICE Program by April 1 will have their natural gas plan changed from the utility’s Standard Service Offer (SSO) to its new Standard Choice Offer (SCO).

As choice and competition were made available to Ohio’s natural gas industry, public utility monopolies like Columbia Gas were broken up and became distribution companies — responsible for distributing natural gas to customers in their service territories and maintaining natural gas pipes and related equipment. — Meanwhile, independent alternative natural gas companies, called CHOICE suppliers, were allowed to enter the area and sell gas directly to natural gas customers. As a result, Ohio natural gas customers have the power to choose whether to buy natural gas from a CHOICE supplier, at a price set by that supplier, or from the utility, at a price set by the Public Utilities Commission of Ohio (PUCO), the state’s utility regulator.

Previously, Columbia Gas’ CHOICE-eligible customers who were free to buy their natural gas from an alternative natural gas supplier but who chose to buy their gas from the utility did so under the utility’s SSO plan, which also served customers who were ineligible for CHOICE. Now, however, the utility is making a distinction between the two types of customers: the SCO plan will be for CHOICE-eligible customers who continue to buy natural gas from the utility instead of shopping for an alternative supplier, while customers who are ineligible for CHOICE will remain with the SSO plan. Customers redefined under the new SCO plan will notice the change beginning April 1, but will not be required to shop for a supplier, enroll in the plan or opt out of anything.

The main difference, said Columbia Gas, was that CHOICE-eligible customers who have not chosen an alternative supplier will see the term “SCO” on their bills, along with the name of the supplier that the utility has contracted with to supply them.

Although the name of the SCO supplier may vary from customer to customer, Columbia Gas said that all SCO customers will pay the same monthly price for natural gas, which will be set by an auction held in February, 2012. Columbia Gas said that the auction, which will be supervised by the PUCO, will be similar to the one it holds for its SSO plan. The auction will establish the utility’s SCO Retail Price Adjustment for the entire year, which will run from April 1, 2012 to March 31, 2013. The SCO will be a variable rate plan, which means the monthly price of gas for SCO customers will change based on NYMEX exchange prices for natural gas, plus the utility’s SCO Retail Price Adjustment that it secured at auction in February.

According to Columbia Gas, “CHOICE-eligible SCO customers will enjoy all the supply options that they had as an SSO customer. That means they may select a CHOICE supplier to supply their gas, or they may participate in a governmental aggregation

program if their community offers one. Similarly, CHOICE customers will be free to return to Columbia’s regulated SCO rate if they so choose.”

The utility noted that customers enrolled in its Percentage of Income Payment Plan (PIPP) program, customers in transition and customers who otherwise do not qualify under the CHOICE program will be served by a third plan called the Default Sales Service (DSS) plan. Although DSS customers will be supplied with natural gas by SCO suppliers under an agreement with the utility, DSS customers will not see the name of the SCO supplier on their bills.

Sources

“COH Choice Supplier Communication Concerning Columbia SCO,” Columbia Gas email to suppliers, Nov. 9, 2011.

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