NGI The Weekly Gas Market Report
As legislators across the nation continue to log concerns fromtheir constituents about spiking natural gas costs, Ohio is one ofthe states that has decided to launch an investigation. The stateis in the process of developing a special bipartisan committeecomprised of House and Senate members to examine why gas prices areso high.
“What I am proposing is that a special committee of thelegislature be created,” said Rep. Kirk Schuring, (R) Canton. “Itwould be ad hoc in nature, and our charge would be to thoroughlyreview the natural gas situation in the state and to have a reportand legislative action ready for introduction no later than the endof August this year.”
The legislator said the committee is to be made up of sevenmembers from both chambers, including Republicans and Democrats.Schuring said the speaker of the house and the president of thesenate would chair the committee, and would each appoint one oftheir seven members as co-chair.
“Here in the state of Ohio like so many other states in theUnited States we have experienced an old fashioned winter where wehave seen an increase in our natural gas bills, but the increasesare far and away greater than what the bitterly cold winter hascalled for,” the house member said. “In some cases we have seen adoubling, and in other cases a quadrupling of heating bills.”
A lot of what is going on within the natural gas arena isattributable to national energy policy, or maybe more importantly,the lack of one, Schuring said. He believes that legislators inOhio can “do our due diligence in looking into this crisis verythoroughly.”
While he is in favor of deregulation and a free market, hethinks there are some things in Ohio’s gas deregulation programthat need to be looked into. “I think we need to look at Ohio’spolicy as it relates to natural gas exploration,” the member said.”Maybe we need to offer more incentives for those who want to drillfor natural gas. I think we need to ask utilities why they don’tread meters as regularly as they once did, and also, how they canask for a rate increase during peak demand periods, but under thisnew deregulation, a consumer only has a few windows of opportunityto make a choice and when they do, they are locked into a long-termcommitment.”
The lawmaker said he is encouraged by the 20 house co-sponsorsthat have already signed on to support the cause. He said the billto form the committee is likely to be introduced sometime afterGovernor Bob Taft’s state of the state address next week, butbefore the end of the month.
“The idea is to have whatever legislation that is deemedappropriate ready for introduction in the fall so that we can dowhatever we can to help alleviate similar prices that might occurduring the winter 2001-2002,” Schuring said.
In related action, the Ohio Consumers’ Councel (OCC) late lastweek filed a petition with the Public Utilities Commission of Ohio(PUCO) requesting an investigation into the current state of thenatural 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.
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 last week pleaded with gas customers in the state toresearch every supplier’s offer prior to enrolling. The councilcited the recent meltdown involving gas supplier Stand Energy Corp.in the Columbia Gas Choice program as a cautionary tale. StandEnergy — 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 thatoffered by Columbia Gas of Ohio.
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