Ohio House, Senate Examine Gas Prices, OCC Questions Deregulation

As legislators across the nation continue to log concerns from their constituents about spiking natural gas costs, Ohio is one of the states that has decided to launch an investigation. The state is in the process of developing a special bipartisan committee comprised of House and Senate members to examine why gas prices are so high.

"What I am proposing is that a special committee of the legislature be created," said Rep. Kirk Schuring, (R) Canton. "It would be ad hoc in nature, and our charge would be to thoroughly review the natural gas situation in the state and to have a report and legislative action ready for introduction no later than the end of August this year."

The legislator said the committee is to be made up of seven members from both chambers, including Republicans and Democrats. Schuring said the speaker of the house and the president of the senate would chair the committee, and would each appoint one of their seven members as co-chair.

"Here in the state of Ohio like so many other states in the United States we have experienced an old fashioned winter where we have seen an increase in our natural gas bills, but the increases are far and away greater than what the bitterly cold winter has called for," the house member said. "In some cases we have seen a doubling, and in other cases a quadrupling of heating bills."

A lot of what is going on within the natural gas arena is attributable to national energy policy, or maybe more importantly, the lack of one, Schuring said. He believes that legislators in Ohio can "do our due diligence in looking into this crisis very thoroughly."

While he is in favor of deregulation and a free market, he thinks there are some things in Ohio's gas deregulation program that need to be looked into. "I think we need to look at Ohio's policy as it relates to natural gas exploration," the member said. "Maybe we need to offer more incentives for those who want to drill for natural gas. I think we need to ask utilities why they don't read meters as regularly as they once did, and also, how they can ask for a rate increase during peak demand periods, but under this new deregulation, a consumer only has a few windows of opportunity to make a choice and when they do, they are locked into a long-term commitment."

The lawmaker said he is encouraged by the 20 house co-sponsors that have already signed on to support the cause. He said the bill to form the committee is likely to be introduced sometime after Governor Bob Taft's state of the state address next week, but before the end of the month.

"The idea is to have whatever legislation that is deemed appropriate ready for introduction in the fall so that we can do whatever we can to help alleviate similar prices that might occur during the winter 2001-2002," Schuring said.

In related action, the Ohio Consumers' Councel (OCC) late last week filed a petition with the Public Utilities Commission of Ohio (PUCO) requesting an investigation into the current state of the natural gas industry in Ohio.

"We feel the strain being placed on the pocketbooks of residential consumers when it comes to paying their natural gas bills,'' said Robert S. Tongren, Consumers' Counsel. "We need to find out the cause of these increases, so we can alleviate the fear of this crisis ever happening again."

The Counsel has also asked PUCO to review the state's natural gas choice programs, which have recently faced significant setbacks. The counsel said that many suppliers have recently terminated service, sending thousands of consumers back to the utility to pay higher rates. There are less than 10,000 customers left in the Cincinnati Gas & Electric choice program, and currently there is no supplier accepting customers at competitive rates, the group said.

If the Commission approves the gas cost recovery filings of Columbia Gas of Ohio, Vectren Energy Delivery of Ohio and Dominion East Ohio, consumers will be paying 79%, 118% and 132% respectively more for the price of the natural gas commodity today than they were a year ago, the OCC said.

"We receive calls every day from consumers who must select between purchasing medical care, buying food or heating their homes,'' Tongren said. "While we believe the rising gas prices are a result of supply and demand, for many consumers who heat their homes with natural gas the issue has become a matter of survival."

The OCC last week pleaded with gas customers in the state to research every supplier's offer prior to enrolling. The council cited the recent meltdown involving gas supplier Stand Energy Corp. in the Columbia Gas Choice program as a cautionary tale. Stand Energy --- which supplies 8,000 residential customers in Ohio --- mailed letters to all of its variable rate customers on Jan. 8, informing them that it could no longer offer a rate lower than that offered by Columbia Gas of Ohio.

Alex Steis

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