Natural gas prices at 5+ year lows; what does that mean for choosing a gas supplier?

CLEVELAND - The slowdown in the manufacturing industry means there is a surplus of natural gas. This will give consumers a price break for this winter's home heating season. The Public Utilities Commission of Ohio (PUCO) said prices are at 5 to 7-year lows right now.

"The price is a market price and it's driven by market factors so right now we are seeing things relatively low but you never know what could occur in the next few months that could change that," PUCO Spokesman Shana Eiselstein explained.

Click here to see Dominion East Ohio rates since 2007

Click here to see Columbia Gas rates since 2007

Click here to see Vectren rates since 2007

Click here to see Duke Energy rates since 2007

Gas Choice

Consumers in Ohio have a choice to make. They can keep the price currently offered by their gas company, or they can lock in a price with a different supplier with the Gas Choice Program .

It's a program that allows for gas competition. Consumers can shop for a supplier much like they shop for a good price on clothing or electronics. It may increase competition, but is it also increasing confusion among consumers?

We asked state regulators to show us the calls they get about the program. We got 4,290 pages of documents. We poured through them to warn you about potential problems.

Top issues: cancellation fees and competitive offers

"Some of the choices I don't understand," Cleveland resident Hildry Williams explained.

Williams learned the hard way that being an un-informed consumer can cost you money.

"The representative came around and knocked at the door and insisted to see my gas bill," Williams explained.

Williams said the door-to-door salesman made the Choice Program seem easy and talked her into a contract. A few months later, Williams said her bill doubled.

"The gas bill was $469. My house payment is just a little bit more than that," Williams explained.

Hildry bought a programmable thermostat and dropped the temperature at night. That didn't drop her bill. Williams looked at her bill, and she noticed the price her supplier was charging for gas was awfully high. 

"When my contract expired, I went into a variable rate. That was not explained to me not at all, so I was very upset," Williams explained.

We found Williams is one of 1,968 Dominion East Ohio and Columbia Gas customers who contacted state agencies about the Gas Choice program during the last 3 years.

The Ohio Consumers' Counsel saw an increase in calls after Dominion East exited the merchant function in 2009. Customers were confused about the mailing and didn't know how to choose a supplier if they chose that option.

According to PUCO documents for the last three years, the suppliers that generated the most calls to the state regulator for the Dominion East Ohio territory include Dominion Retail, Interstate Gas Supply, and MxEnergy. All three generated more than one-hundred inquiries to PUCO.

In the Columbia Gas service territory, Interstate Gas Supply stood out as the leading supplier that generated calls to PUCO.  State documents show Interstate was the topic of 208 calls.  Commerce Energy, Direct Energy Services, and MxEnergy all had more than one-hundred calls to PUCO.

These numbers should not be used as your sole deciding factor in choosing a supplier. Click here to see all the results for each supplier and issue .  PUCO may get more calls about one company over another depending the supplier's customer base.

Overall, the top reasons people called PUCO were over issues related to cancellation terms and fees followed by questions about competitive offers.

"Customers should not feel like they are getting scammed," Eiselstein explained.

PUCO defends the program and said it saves consumers money. The state's regulator reminds consumers to make smart choices, and to avoid making a decision based on marketing material.

"The suppliers are in the business to make money so obviously they take whatever marketing tactics they need year to year," Eiselstein said. "It doesn't mean that is wrong at all. They are in the business to make money and they are certified by us as reputable suppliers."

While the marketing made Williams angry, she didn't let one supplier spoil her feeling for the whole program.

"Don't stop with because I'm confused I'm not going to do anything.  Get that better rate for yourself," Williams said.

Shopping for a supplier
We found some callers to the Ohio Consumers' Counsel (OCC) didn't know how to find that better rate. Some didn't even know who supplied their gas.

The first tip -- don't fall for a door to door salesman's pitch.

"The last month I've had three different companies come to the door telling me what my neighbors locked in and how much they saved them. When I talk to my neighbors they don't know what I'm talking about, so don't listen to that stuff. It's not true," Williams explained.

PUCO also has a warning.

"They should get the information from the sales representative, and say they want to do some checking and that

if they are interested they will call back to sign up for the offer," Eiselstein said. "We certainly never encourage individuals to supply their account number or any other personal information."

PUCO updates the offers weekly for all certified suppliers and posts them in an Apples to Apples Chart .

"It was a roadmap for me. It gave me options," Williams explained.

Some customers called PUCO after they realized the listed rates are promotions or apply only to new customers. So Williams calls every company and asks specific questions about the deal.

Ask if it's a fixed or variable rate, ask about the contract length, find out what happens when the contract is over, and find out if there is a cancellation fee if you find a better rate somewhere else.

When Williams has those answers, she looks on her bill to see her usage.

Then she plugs all the numbers into PUCO's interactive calculator , and the program does the math for you so you can determine if choosing a supplier will save you money.

 

L etting your community make the "choice "

If you are not comfortable making the choice for yourself, your community may offer aggregation. That's when they choose the supplier for you.

"These groups are finding they can get even lower prices than if it was to be an individual person looking to get a better rate. These communities will band together and they will put forth an initiative and as long as it is approved by the voters it becomes an aggregation program," Eiselstein explained.

Aggregation happens for electric and gas utilities. Electric is deregulated like gas, but there's not as much competition in Northeast Ohio. So, aggregation may be your only chance to save with an electric supplier.

Click here to see if your community offers gas aggregation

Click here to see if your community offers electric aggregation

Opt-out aggregation

Most communities have "opt-out" aggregation programs which means if you do nothing, you are opted into aggregation.

"Typically they choose opt-out because it's an easier way to get a large number of people together," Eiselstein explained.

The supplier will send you letters to notify you of your option to "opt-out."

Of the complaints I reviewed for the Gas Choice program, I found customers called the Ohio Consumers' Counsel upset over "opt out" aggregation.

OCC notes said, "The consumer is upset with the process when participating in Aggregation. He was not aware of this program, nor does he think it is fair to make the decision for him. He prefers to make all his decisions and to be automatically enrolled without his permission is crazy."

That customer lived in Cleveland, and didn't recall any notices about aggregation.

OCC's notes for a call with a North Olmstead customer said, "The customer feels it is unfair to make customers send back the post card if they want to "opt out" of aggregation. She feels you should have to "opt in" to aggregation."

Kim Seal shared similar comments with 5 On Your Side after calling us when her electric company unexpectedly opted her into aggregation.

"They are hurting the consumer more than they are helping them," Seal explained.

Seal said she doesn't remember the letters alerting her to the opt-out aggregation. She also learned that perhaps she needs to pay more attention to what she thinks might be junk mail.

"Don't throw away junk mail, look at it," she explained.

Seal realized something was wrong when her bill from FirstEnergy showed a $20 increase.

FirstEnergy Solutions Corp. says aggregation saves you money

First Energy offers community aggregation through its competitive subsidiary, FirstEnergy Solutions Corp.

FirstEnergy Spokesman Ellen Raines said the program actually helps customers.

"It's actually very easy because you know you are saving money and you are not having to price compare."

A discount automatically comes off your bill. Customers like Seal may not realize this because most suppliers don't offer budget billing. So you pay for your actual usage.

Seal's switch happened during a warm month when usage is up.

"If you look at twelve months of billing you will still see savings," Raines explained.

FirstEnergy reviewed Seal's bill and found she actually saved $3 the month her community aggregated her bill.

For Seal, that small monthly savings is not worth the shock of a bill constantly in flux.

"If I was working, this wouldn't be an issue for me," Seal explained.

If you don't opt out before the deadline, you have to pay a cancellation fee. For Seal, that cost her another $25 she doesn't have.

Problems

If you have a problem with the Choice program, there are agencies willing to help. PUCO, the state's utility regulator, has investigators that work with customers and the company in question to find a resolution to the situation.

"Our goal really is to mediate the situation between the customer and the company involved. If we can't reach a resolution the customer is satisfied with, the customer has the choice of filing a formal complaint