An additional 1.6 million customers in 41 Ohio counties could bechoosing alternative gas suppliers this winter, followed by morethan 2.8 million customers in 57 of Ohio’s 88 counties in November1999, if the Public Utilities Commission of Ohio (PUCO) accepts itsstaff’s recommendations. Based on good results in pilot programslast winter in metropolitan Toledo (Columbia Gas), Canton andMarietta (East Ohio Gas) and in greater Cincinnati (Cincinnati Gas& Electric), staff told the full commission the three pilotprograms should be expanded as soon as possible.
Staff said Columbia’s program should be expanded to offercompetitive options to the company’s entire 1.3 million customers.East Ohio’s program should be expanded to include its 434,000customers in Cuyahoga County and by the summer of 1999 to itsentire service territory of 20 counties. And CG&E’s programshould be continued for all its 360,000 natural gas customers. APUCO decision is expected in June.
The report focused on the high participation levels and customersavings in the pilots. In Columbia’s pilot in three northwesternOhio counties, for example, more than 60,000 customers, including30% of eligible residential customers and 46% of eligible smallcommercial customers, chose to participate in the program.Competitive gas companies offered rates up to 18% less thanColumbia’s tariffed rates. In East Ohio’s pilot, centered in Cantonand Marietta, nearly 33,000 customers participated, including 19%of eligible residential and small commercial customers. Customersavings were as high as 7.4%. And in CG&E’s seven-county pilotin southwestern Ohio, about 11,000 customers participated – about2% of eligible residential customers and 9% of small commercial.Potential customer savings were significantly lower in CG&E’spilot (6%) compared with the other two companies, primarily due toCG&E’s tariffed rates being less than Columbia’s or EastOhio’s.
“One of the main reasons for the low (CG&E) participationlevels in comparison to the Columbia Gas program is that customerswere unable to experience the savings that were available at thestart of the Columbia Gas program,” PUCO staff said in itsevaluation.
The PUCO staff also based its recommendations in part on sixmail surveys in 1997 and 1998 to random samples of natural gascustomers in the pilot areas. Staff found customers with ahousehold income of $25,000 a year or more were more likely to havechosen an alternative natural gas supplier than households withincomes below $25,000 annually. The surveys indicated natural gascustomers preferred direct mail marketing over any other type ofcustomer contact from marketing companies, and direct pricecomparisons among various marketing companies were the averagecustomer’s most sought-after information. One of the most helpfulconsumer aids produced for the pilot programs, the surveys showed,was a series of “Apples to Apples” price comparison chartspublished monthly by the PUCO last winter. The staff recommendedpublication of these charts be continued and distribution widened.
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