Dominion East Ohio announced recently that its sales customers will pay 29% less for natural gas than they now do under a new rate that will be frozen through April 29, 2002, due to an innovative gas cost recovery (GCR) filing made with the Public Utilities Commission of Ohio (PUCO). The company said about 580,000 of its 1.2 million customers will be affected by the change because they buy natural gas from the company at rates regulated by the PUCO. Other customers buy gas from competitive suppliers under market-based rates.
Under the plan, which was developed jointly by the company and the PUCO, Dominion East’s sales customers will pay $6.17/Mcf, effective July 30. That represents a 29% savings from the current GCR of $8.70/Mcf. The typical residential customer would save more than $280, or an average of $31 a month, over the next nine months, Dominion East said.
“Not only will our sales customers experience a 29% gas cost decrease, they also will enjoy stable rates throughout the winter heating season,” said Edgar M. Roach Jr., Dominion East Ohio CEO. “We worked closely with the PUCO and its staff to develop this innovative proposal, which will provide stable gas costs and remove the price volatility that customers experienced last winter.”
Historically, Dominion East said it adjusts gas costs quarterly, but under the new proposal those costs would remain fixed at $6.17/Mcf. Because of the recent drop in national gas market prices, the company said it has been able to take advantage of innovative gas purchasing methods. It will also lock in current lower market prices with a combination of longer-term gas purchase contracts and other hedging techniques to stabilize winter gas costs for its customers.
Dominion East said it does not earn a profit on the GCR, which represents the cost of securing natural gas supplies for sales customers. The company is allowed only to earn a profit on the delivery or transportation portion of the bill. That rate, also known as the base rate, has remained stable since 1994, Dominion East reported.
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