What is natural gas aggregation?
Natural gas aggregation is a certification process allowed under the State of Ohio laws for governmental entities, such as the Village of Evendale, to buy natural gas in aggregate for their residents and qualifying businesses. Through the power of group purchasing, aggregate plan pricing can be lower than the regulated rate currently being charged by the public utility. However, depending on the market rate of natural gas, aggregation is not a guaranteed savings over the regulated rate. The Public Utilities of Ohio also explains aggregation in more detail or you can visit The Office of the Ohio Consumers' Counsel for more information.
What was the process for the Village to become an aggregator of natural gas?
Evendale voters approved a ballot initiative in May 2010 to allow the Village to become an aggregator of natural gas. In October 2010 the Village Council approved the Plan of Operations and Governance and was certified as a natural gas aggregator by the Public Utilities of Ohio on November 20, 2010. Village Council approved a natural gas rate plan with Integrys Energy Services in November 2010 which will be in place for qualified residents and small businesses on their meter reading in late January 2011.
What is Evendale's natural gas aggregation plan?
Village Council has put in place a Locked-In Price with Flex Down Opportunity Rate plan. The locked-in price is $0.547 per CCF which will be in place for a one year term. This locked-in price of $0.547 will act as a not to exceed ceiling on your residential gas rate for the one year term. The plan with Integrys also has a 'flex down' opportunity as part of the locked-in price. Although the plan caps the rate at $0.547 per CCF this rate can drop if natural gas market prices go below $0.547 per CCF. If market rates drop, Integrys will 'flex down' your rate for that month approximately 40% of the market difference. To state this a different way, you will have a natural gas rate of $0.547 per CCF for one year. During that year if the market rate for natural gas drops below $0.547 for a month you will have a rate decrease for that month equal to approximately 40% of the difference between the market rate and your locked-in rate of $0.547 per CCF.
Please make sure that you understand - this is an Opt Out program. The PUCO website explains Opt Out in greater detail but it basically means you are in the Locked-In Price with Flex Down Opportunity Rate plan unless you Opt Out. If do nothing you will be in this plan.
What are my other choices?
How do I Opt Out and when will I know to Opt Out?
What would exclude me from being able to participate in this aggregation program?
How do I compare the Integrys rate with my Duke Energy natural gas rate?
Duke Energy bills you for your gas usage with four costs. You can find these four charges on the top of the second page of your Duke bill under Explanation of Current Charges for Gas.
Duke Energy's GCR rate for October 2010 was $0.55277030 per CCF. This GCR is the number to compare.
In order to make an apple to apple comparison you will need to add the sales tax for Hamilton County to the Locked-In plan rate. Duke Energy is required to include an excise tax which is already part of their GCR shown on your bill. Duke Energy does not apply sales tax to your bill. So for the month of October the Duke Energy rate to compare would be $0.55277030 per CCF and Integrys would be $0.547 with 6.5% sales tax ($0.035555) for a total of $0.582555 per CCF. Duke Energy would be $0.029784 per CCF less than the Integrys rate.
Why this plan if Duke is currently a lower cost?
Aggregation allows the Village Council to put in place choices that residents currently do not have as individual consumers. With the Village's agreement with Integrys Energy Services the Village is able to offer residents a fixed rate that is currently lower than any fixed rate being offered to Evendale residents by a competitive supplier. Although Duke's regulated rate is cheaper for October their rate is market driven and will go up or down each month based on the natural gas market. A price ceiling at a competitive rate of $0.547 per CCF offers you stability for a year that your natural gas costs will not go any higher. Natural gas prices are at a low point based on the last few years of pricing and are more likely to rise than fall. However, there is no guarantee that natural gas prices will rise which is why the Village wants to make sure you have all the facts and make an informed decision.
As stated above, you have several choices. One of those choices is the option to enroll in Integrys' variable rate plan. This variable rate plan is similar to Duke's monthly rate, which follows market pricing, but is through Integrys Energy Services. If you prefer this option you need to make sure you do not opt out of the aggregation plan and contact Integrys to switch your choice to their variable plan. A graph of Integrys' rates shows how they compare to Duke Energy over the last three years. Integrys has consistently offered their variable rate clients a lower price. However, please understand that there is no guarantee that natural gas prices will stay below the locked-in price of $0.547. If prices rise above this ceiling you might be saving compared to the rate you would pay with Duke but you would not be saving compared to the locked-in price.
In order to offer a better understanding of how the current Duke Energy rates and Integrys locked-in rate compare we have prepared a chart of sample months from an actual Evendale residential bill. Actual rates and usage for October and November 2010 were used to make this comparison as well as actual rates from January and February 2010 with 150 CCF applied for gas consumption. To better illustrate how a Duke rate decrease would affect your bill the months or January and February 2011 are shown with lower Duke rates at the same 150 CCF usage. Click here to access the pdf file. Since the Gas Cost Recovery charge is the only part of your bill that will be replaced that is the only cost utilized for the comparison.
Questions? Contact information.