In an attempt to find the cause of rising natural gas priceswhile protecting consumers from rate increases, the Ohio Consumers’Council (OCC) late last week filed a petition with the PublicUtilities Commission of Ohio (PUCO) requesting an investigationinto the current state of the natural gas industry in Ohio.

“We feel the strain being placed on the pocketbooks ofresidential consumers when it comes to paying their natural gasbills,” said Robert S. Tongren, Consumers’ Counsel. “We need tofind out the cause of these increases, so we can alleviate the fearof this crisis ever happening again.”

The Counsel has also asked PUCO to review the state’s naturalgas choice programs, which have recently faced significantsetbacks. The counsel said that many suppliers have recentlyterminated service, sending thousands of consumers back to theutility to pay higher rates. There are less than 10,000 customersleft in the Cincinnati Gas & Electric choice program, andcurrently there is no supplier accepting customers at competitiverates, the group said.

“We’ve talked to consumers who complain because they areconfused about how to enroll with a marketer, who find the processtoo difficult, who are angry about marketers failing to live up totheir contracts and who are disenchanted with deregulation ingeneral,” Tongren explains.

If the Commission approves the gas cost recovery filings ofColumbia Gas of Ohio, Vectren Energy Delivery of Ohio and DominionEast Ohio, consumers will be paying 79%, 118% and 132% respectivelymore for the price of the natural gas commodity today than theywere a year ago, the OCC said.

“We receive calls every day from consumers who must selectbetween purchasing medical care, buying food or heating theirhomes,” Tongren said. “While we believe the rising gas prices area result of supply and demand, for many consumers who heat theirhomes with natural gas the issue has become a matter of survival.”

The OCC earlier last week pleaded with gas customers in thestate to research every supplier’s offer prior to enrolling. Thecouncil cited the recent meltdown involving gas supplier StandEnergy Corp. in the Columbia Gas Choice program as a cautionarytale.

Stand Energy — which supplies 8,000 residential customers inOhio — mailed letters to all of its variable rate customers onJan. 8, informing them that it could no longer offer a rate lowerthan that offered by Columbia Gas of Ohio.

The marketer’s variable rate rose to $1.63 per hundred cubicfeet in December (as quoted in the Toledo Blade on Jan. 10, 2001),more than twice the amount of Columbia Gas’ current GCR of $0.74per 100 cubic feet. In the letter, Stand offered its customers theopportunity to voluntarily terminate their contract and return toColumbia Gas, or choose another natural gas supplier.

In a statement, the OCC stressed in particular for consumers tobe wary and pay special attention to variable rate plans. Many gassuppliers do not disclose the formulas they are using to fluctuatethe rate, the OCC pointed out. Even though rates that are not fixedare “required to be reasonable and set in good faith” under Ohiolaw, the policing of the violations is hard to maintain, and evenharder to prove.

“We can’t emphasize enough the importance of education.Consumers need to read all the information they can get their handson before making a decision about a natural gas supplier,” statedTongren. “We understand that people are struggling with the highcosts of gas. It’s important for consumers to know that variablerates increase and decrease, depending on the market.”

Stand asked its Columbia customers to contact the company bynoon on Jan. 15 if they wanted to terminate their contract. Ifrequests were not received by the deadline, the consumer will notsee Columbia Gas’ or a new supplier rate until the March bill, thecompany said.

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