Low natural gas prices keep customers with standard choices

Despite deregulation, natural gas customers in the Dayton-Springfield area have in the past year stuck with their default providers rather than taking up offers from suppliers marketing alternatives.

Statistics from the Public Utility Commission of Ohio show that of 309,630 Vectren Energy Delivery of Ohio customers in June, only 42 percent were enrolled to be served by an unregulated supplier as part of the utility’s choice program, down from 49 percent in June 2012.

For Columbia Gas of Ohio as of June, 35.4 percent of Columbia households, which includes Clark County, had signed up for an unregulated supplier in the utility’s choice program, down from 37.5 percent in June 2012.

It’s a different story for Duke Energy of Ohio’s 416,706 customers, with 47 percent in the choice program in June, up from 34.2 percent in June 2012.

“A customer’s choice to shop or not shop is based upon the standard service price versus the options being made available by suppliers in that service area. As these variables differ geographically, differences are to be expected,” Duke Energy Ohio & Kentucky spokeswoman Sally Thelen said.

In recent months, however, Vectren said the customer choice figure has crept back up to 47 to 48 percent. That’s because customers usually consider switching when the cold season approaches.

“That is usually when the marketers get more active in soliciting customers and offering deals,” Vectren spokeswoman Chase Kelley said. But over the past five years, Vectren customers have steadily migrated to shopping around and actively choosing a supplier, she added.

If a customer does not choose a supplier, the household or business gets the default, which is known as the standard choice offer. In Vectren’s case, that is provided by a selection of three who all offer natural gas at the same price — Direct Energy, Hess and DTE Energy. Vectren divides its customers among them.

Vectren and Columbia hold annual auctions to enable suppliers to bid on that customer base. Duke does not hold an auction. It calculates a default price based on expected costs to purchase and transport gas to customers.

Kelley said a number of factors are at play — historically low gas prices, which removes a sense of urgency for supplier shopping, and many customers still assuming Vectren is a supplier of gas rather than the operator of the delivery system.

“They have not jumped in to learn more about options, and our research has validated that,” Kelley said. “We have launched a program to inform customers that Vectren is not a natural gas supplier, that we partner with suppliers to fulfill your natural gas service.”

Columbia spokesman Steve Jablonski agreed that low prices have reduced the urgency of customers considering a switch.

“Prices are low and people aren’t paying that much attention,” he said. “It’s not the hot issue it was a few years ago when gas prices were spiking.”

Going into winter, there could be price volatility, so customers are advised to shop around, Kelley said.

Marty Berkowitz, spokesman for the Ohio Consumer’s Counsel, said more competitive offers in Duke territory increases customers in the choice program. This month, Duke is charging 53-cents per 100 cubic feet of natural gas. In most cases, customers can lock into a fixed rate for a year that is competitive, or is low on a teaser rate.

In the case of Columbia, that utility is offering a very competitive price, he added.

“The bottom line is people are going away from the marketers and staying with Columbia because they can get a better rate,” Berkowitz said, adding that his office advocates for a standard or default supplier option in the event customers don’t choose a supplier, as a way to keep prices low.

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