The Akron Beacon Journal, Betty Lin-Fisher column

Akron Beacon Journal |

--Note: This is a primer on how to get the Standard Choice Offer (SCO) for natural gas and other helpful information, including how to choose an electricity provider. The information is all accurate and the SCO pricing is updated monthly.

This column should give you all of the information you need to know (and maybe more than you care to know!) about how to save money on natural gas.

For some time, I have recommended Standard Choice Offer (SCO), or monthly variable price through approved-Dominion providers. While it does go up and down, the SCO has consistently been beating fixed prices offered by competitors and most community aggregations.

Prices for some time have been at historic or near historic lows and the forecasts are that they will continue to stay low.

Also, because it's based on a state-approved formula, the SCO is transparent, unlike marketers' variable prices.

That formula is set each year during a competitive auction in February. That auction determines the "adder" price for one year. The SCO is based on the New York Mercantile Exchange price on the third to last day in the previous month, plus the adder, which is generally anything from a few cents to a few dollars.

The adder price for 2016 actually came in at negative 5 cents.

The 2017 adder came in at zero, so that means that the wholesale market price will be the SCO, beginning , with no adder. That's still great news for consumers.

Pull out your bill; do a checkup

While I know a lot of readers have followed me in choosing the SCO and are saving money, there are a lot of people who haven't gotten around to it.

I totally get it. I'm a working mother of two teens and we are constantly on the run. Heck, if I didn't keep track of natural gas prices for a living, maybe I wouldn't have gotten around to pulling out my bill.

But it could be costing you a lot of extra money, so it's worth a quick review.

In , I wrote a column filled with statistics showing that Ohio consumers were overpaying for their natural gas by millions of dollars because they hadn't updated their choices or adequately shopped.

So while like I feel like a broken record, or a nagging and concerned wife, it's time for you to pull out your gas bill and make sure you're getting the best deal or to confirm that what you think you are signed up for is really what you are getting.

Often I get people thanking me after they finally got around to pulling that bill out, only to be shocked by the prices they really were paying because they let life get in the way. I had an email exchange with a reader who said she knew she should be on the SCO, based on reading my columns, and thought she was. But after we investigated with Dominion, she had called to cancel her community aggregation rate with that gas company, which sent the cancellation notice to Dominion. But she never called Dominion directly to tell them she wanted the SCO and she ended up with a rate called the Monthly Variable Rate (MVR), which can be much higher.

So go grab your bill and let's walk through what you need to do.

And as I've said before: If you make a different decision than me, I'm not going to be hurt. Some people like to find a fixed rate that they think is fair with a low cancellation fee and forget about it.

What is the SCO?

The SCO, a monthly rate determined by a state-approved formula, is determined by using the closing price on the third to last day of the previous month on the New York Mercantile Exchange (NYMEX) plus an "adder," which is determined every April in a supplier auction. In a auction, the adder came in at zero, meaning the wholesale price will be the SCO, starting .

In the last year, it has ranged from a low of $2.58 per thousand cubic feet (mcf) in March (2017) and a high of $3.88/mcf in January.

A spot check in September (2017) of current fixed price contracts range from $2.99/mcf to $4.99/mcf, some with high cancellation fees.

Here's the latest SCO price:

Dominion Energy Ohio's monthly natural gas price for residential customers who are on the Standard Choice Offer continues to be low for October.

Effective , the SCO will be $2.97 per thousand cubic feet (mcf). The October rate is 1 cent or 0.3 percent higher than the September rate of $2.96/mcf. It is 7 cents or 2.4 percent more than the price of $2.90/mcf a year ago.

Under the company's filing, the average SCO/SSO residential customer's bill for August would be $34.77, up $2.18, Under the company's filing, the average SCO/SSO residential customer's bill for the month of would be $48.12, up $1.67, or 3.6 percent, from $46.45 in .

All customers pay a fixed $27.71 for the basic monthly charge and a usage-based charge.

I continue to recommend sticking with the SCO. While some readers have asked me if I'm nervous that the price inched up this winter, I have told them that I am still comfortable with the SCO. While the price is higher than last winter, last winter's rates were also 35-year-lows and prices this winter are still below the price two years ago and lower than five-year averages.

Here's some historical prices for the last several years: : $2.96/mcf; : $2.97/mcf; : $3.07/mcf; : $3.24/mcf; : $3.14/mcf; : $3.18/mcf; : $2.58/mcf; : $3.34/mcf; : $3.88/mcf, : $3.18/mcf, November: $2.71/mcf, October $2.90/mcf, September $2.80/mcf, August $2.62/mcf, July $2.87/mcf, June $1.91/mcf, May $1.95/mcf, April $1.85/mcf, March $1.73/mcf, February $2.21/mcf, January $2.39/mcf, $2.23, $2.05/mcf

(If you live in the Columbia Gas territory, your pricing structures are different, but the principles are the same and the SCO would also be my choice.) When I consulted with Jeff Murphy, Dominion East Ohio vice president and general manager, he said he often will take a look at the NYMEX futures prices for the upcoming winter and come up with an average to use as a "marker" when looking at fixed rates.

How do I know if I'm already on the SCO?

Pull out your Dominion bill.

You are looking for the price you pay, which is close to the MCF usage on your bill. Bills vary, but look on the left-hand column above "total current charges" for the correct section.

If your bill has the letters "SCO" next to a supplier, you are good to go and you don't have to do anything. As long as the bill says SCO, the supplier itself doesn't matter. Every year in April, Dominion randomly re-assigns the winning bidders in the auction to customers, so you may see a new name on your bill next to the SCO, but it should make no difference to you.

You will continue to get the SCO unless you choose your own provider for a fixed rate or a variable rate from another marketer or through an aggregation, which is a government bulk-buying group.

You can also use an educational website Dominion has set up, http://www.tinyurl.com/domeducate, with pictures of sample bills, to help you find where your supplier costs are.

How do I get the SCO?

As you spot-check your bill, if you are still on a fixed rate, or higher than the SCO, find out how much time is left on your contract and if there is a cancellation fee. Some fees can be hefty -- but you likely will save -- if your rate is high.

The average household uses about 100 mcf of gas a year. Take the difference between prices and multiply by 100 to see the savings.

To switch to the SCO, call Dominion at 800-362-7557 from . Mondays tend to be the among the busiest days, so perhaps pick a different day to call.

Tell Dominion you want to cancel your current provider and switch. You have to specifically ask for the SCO, or Dominion will move you to the nonregulated MVR by the third month instead of the SCO, which you don't want because they are those unregulated variable rates.

It will take up to two billing cycles to switch to what is called an "SSO" (the same price as the SCO). If by the third month, you see "MVR" instead of "SCO," call Dominion.

During the time you have the SSO, don't worry that the price looks higher.

Despite my advocating for Dominion to change their bill, it does not give you a separate line item for delivery charges, so that SSO price includes both the SCO and delivery charges, which everyone pays. In small print, it will list the SCO price. One note: a PUCO change a few years ago means nonresidential customers are no longer eligible for the SCO and must choose their own provider or pay the MVR.

What if I just want a fixed rate?

That's up to you. I understand that some people just want that stability, even if they know that might mean they pay a little more or less (depending on the SCO pricing and market) for peace of mind.

You can research fixed and variable rates on the Public Utilities Commission of Ohio's Apples to Apples chart, http://www.energychoice.ohio.gov or 800-686-7826. Make sure you choose "Dominion East Ohio" for your territory.

Some of the monthly variable prices sometimes look competitive to the SCO, but keep in mind most of the marketers don't have a formula they will share, so their prices could swing or they could offer a cheap price one month and high the next. They also may have a lag and are reporting last month's rate.

I did crunch some numbers and utilized an archive website that let me look up those NYMEX futures prices from previous years. I then took the average winter price, adjusted it with the "adder" at the time, and compared it to the SCO prices for every year since 2012.

In looking at four year's of winter data, 2012 through 2015, the average SCO beat the average adjusted futures price three out of the four years. It beat it by 83 cents in winter of 2015, 62 cents in 2014 and 66 cents in 2012. In 2013, the SCO was 20 cents higher than the adjusted futures average, but that's still not too bad, in my opinion.

Murphy with Dominion said it's important to remember that the Nymex is just an indicator of what the market believes prices will be. "Variables like weather, storage inventories, use of natural gas for power generation and the like will inevitably cause actual prices to differ from those Nymex projections."

Prices look to be moderate by historical standards, both with the SCO and fixed prices, he said.

In some ways, we've gotten spoiled with these low prices because we forget that there were many years when we thought a $9.99/mcf or even a $12/mcf price was cheap while other prices soared to $16/mcf.

Since none of us have that crystal ball to know exactly what will happen with prices, I can't give you the slam-dunk answer. But what I can tell you is that the difference in our bills if you stick with the SCO, like me, or take a fixed rate, is pretty minimal, so we are not talking about hundreds of dollars difference.

Where there may be hundreds of dollars of difference is if you are still stuck on a high fixed rate that you never got around to checking on or if you are with a marketer's own variable rate, which can sometimes be quite high.

What about aggregations?



I've written a lot about aggregations, or bulk-buying via communities, but there still seems to be confusion about them. Community officials created aggregation groups in the early 2000s, after voters passed ballot measures allowing the groups to be formed. Officials have told me over the years that they do their best to get the best price, but there's no guarantee that the price is the best or will beat what you can get on your own, or lately with the SCO. Aggregations automatically include community members who haven't actively chosen their own fixed rate or variable rate supplier. For those of us on the SCO, though we've "chosen" that, for aggregation purposes, we're still included in the aggregations, unless we opt-out, so make sure you don't ignore those notices.

Akron voters approved a ballot issue in March to create a gas aggregation. City officials tell me they are still working on getting that set up and a decision will not be made before this winter's season. So I would suggest if you live in the City of Akron, that you get the SCO.

If you inadvertently get switched to an aggregation, call Dominion and say you want to switch back, but you will have to go through the process to switch and remember, you must request the SCO. Aggregation contracts typically don't have cancellation fees, so you can always join -- and if the SCO continues to beat it, you can leave.

Aggregations are on different cycles, but many renew in the fall.

I have not seen competitive rates that beat the SCO via most community aggregations, so I usually suggest that you opt-out.

The only exception for an area aggregation plan that is worth considering is through NOPEC, or the Northeast Ohio Public Energy Council. The consortium of 220 governments and more than 330,000 customers up to now has mostly included northern Summit County and Portage County in our area.

In the spring of 2017, Summit County Council approved NOPEC for its natural gas contract, which is to begin in October.

In late August, 8,400 postcards have gone out to all Summit County townships and residents of the city of New Franklin. (Summit County's aggregation contract is not for other communities in the county; most have their own aggregations).

A reminder about how aggregations work: they are based on ballot approvals by voters, mostly in the early 2000's. So unless you have specifically chosen a marketer on your own, say for a fixed or variable rate (the SCO doesn't count), then you will receive a letter and you will automatically be included in the aggregation, unless you opt out by mail or a phone call.

While those of us on the SCO actively chose it, you will still be included in a community aggregation, unless you permanently opt-out (instructions are in that online column).

Back to NOPEC and here's where it gets a little confusing.

NOPEC usually offers two programs to its natural gas customers: what it calls its "Program Price," which is typically competitive with the market and can change anywhere from monthly to every 60 days or so.

It also offers a variable price that is guaranteed to be 2 cents/mcf below the SCO. NOPEC customers automatically get the "program price," unless they specifically call for the 2-cent-below plan. A note about that plan: while it beats the SCO by 2 cents and that's good, given the cheap prices of the SCO, the average residential customer uses 100 mcf a year, so we're talking about a $2 a year savings. So don't lose any sleep over this.

NOPEC customers in the 220 communities who are already with NOPEC (so non-Summit County folks) currently have a "program price" of $2.95/mcf for August. That price will remain for September and has been changing monthly as NOPEC officials buy their gas supply.

For the new NOPEC customers, or those in Summit County townships and New Franklin, your program price will be $2.99/mcf fixed beginning with the October billing cycle through December. You also have access to that 2-cent-below the SCO price, if you request it. NOPEC Executive Director Chuck Keiper said he hopes to have all of the NOPEC customers on the same price by the new year.

My advice for those in a NOPEC community is that either of these options is fine. Keiper said the options are available for people to decide. The program price is sometimes slightly above or below the SCO.

"Our strategy is always to keep people in the bottom 3 to 5 percent of the market," he said. "If you don't mind watching (the market)...then you want the guaranteed 2-cents-below option."

Most people choose the program price, Keiper said. "Most people want to take their hands off the wheel," he said.

Since I think the SCO is fine, I would recommend the 2-cent-below program, though again, I think either is fine.

To opt-out, you must either mail back the postcard you received in the mail or fax it to 800-238-5679 by or you will be included automatically. If you want to join NOPEC's program price, you don't need to do anything. If you want the 2-cent-below price, you must call NOPEC at 855-NOPEC-01 (855-667-3201) and it does not automatically renew.

Another footnote: If you were on the ball and mailed in your opt-out postcard last week as soon as they arrived, you may have noticed that the postcards were going to an address in Houston. Keiper said there was initial worry that the postcards were stuck in a regional postal facility since the Houston office was under water, but the postcards have been located and are being redirected to another location. But if you are worried and want to ensure that your opt-out is registered so you don't accidentally get moved to NOPEC's rates, you can call NOPEC at the number above.

Another housekeeping thing for all NOPEC customers: since Summit County's folks came within NOPEC's current contract, and because NOPEC wants to get all of its customers in the same cycle, all customers will be included in the next opt-out mailing in late January. So if you don't want NOPEC at that time, you will have to opt-out again.

This NOPEC opt-out also is not for electricity; Summit County customers are still on an aggregation plan with FirstEnergy Solutions.

Update 9/20: If you are an existing Summit County Township aggregation customer with Constellation, you were part of the group that erroneously didn't get letters sent out in time. Read this column for the latest.

Akron, Cuyahoga Falls

A quick note on two other area-aggregations.

City of Akron voters in approved a ballot issue to create a natural gas aggregation. City officials are still working on that and likely will not have a decision until late winter or early spring, said the mayor's Chief of Staff James Hardy.

Also, the city of Cuyahoga Falls' aggregation opt-out letters are due by . It's new rate through is $3.46/mcf. In my opinion, that's too high.

So if you live in Akron or the Falls, I'd suggest you go with the SCO.

Permanently opting out

Customers on the SCO or those who don't have their own contract with a natural gas provider are automatically included on lists Dominion is required to share with retail marketers and aggregation groups. If you don't want on those lists, opt out through Dominion. Go online to https://www.dominionenergy.com/home-and-small-business/energy-choice/eligible-customer-list, call 800-362-7557 or write Dominion at Box 5759, Cleveland, OH 44101-0759.

Tell them you want to get off the "Eligible Customer List."

I've done this so that I don't accidentally get grouped into my community's aggregation contract, if I happen to miss the opt-out notice in the mail.

This doesn't mean all gas offers by mail will end. I still get some offers, likely because I'm still on some mailing lists as a former customer.

Budget billing explained

Budget billing is an option offered to give customers a way to have consistent payments by estimating usage based on normal weather, historical consumption and the customer's rate at the time of enrollment or during the annual review in May. A review is also conducted in November to make any necessary adjustments to minimize large over-or underpayments for the annual true-up in May.

It's a way for customers to spread out the costs of their heating bill over the course of a year where they will be paying the same amount year-round instead of paying the high actual costs during the winter. It also means that during the summer months when very little natural gas is being used, you're paying a higher amount.

I have been using budget billing for years and find it very helpful so I don't get huge swings in my bills during the winter heating months. Plus, for the last several years with SCO rates being so low, my budget bill amounts have been incredibly low. In fact, this year, I went four months this summer not having to pay anything since I had a balance and now my budget has been adjusted to just under $50 a month.

Dominion has put together a really helpful handout explaining a few scenarios for changes in budget billing and you can find that in the box that appears with this column labeled "Dominion East Ohio Budget Billing Explanation 2016."

What about nonresidential, nonprofit, church or small-business accounts?

If you are a small business or nonresidential account, such as a church, the state eliminated the SCO choice for you in 2013.

The PUCO allowed Dominion to eliminate the SCO for commercial or nonresidential customers. Consumer advocates at the time said removing the benchmark was unfair, and the system wasn't broken. Dominion officials said the market could become more competitive if the SCO wasn't available to commercial customers.

For those customers who can't get the SCO, you are getting a Monthly Variable Rate (MVR), which is a non-regulated monthly variable if you haven't made your own choice. MVR rates can be high, since there are no regulations, so keep an eye on them.

There is no site where you can compare the MVR or nonresidential rates but you can use the PUCO's chart at http://www.energychoice.ohio.gov as a starting point to see residential prices and phone numbers to consider what companies to call and ask for their nonresidential rates.

Another option is to check with an association, such as your church denomination, regional conference, or other small group, to see if they have created an aggregation group or bulk buying group to save on utilities. Some church denominations participate in aggregations. If you do choose a variable, since wholesale rates are cheap now, know that most companies don't share how they determine their variable rates, so you'll have to keep an eye on them.

If you don't want to do that, or need some stability for your budget given the lack of transparency with the SCO pricing, then consider finding a fixed rate with a cancellation fee your organization can live with (or just stick with it for the contract term length) or try the MVR and keep an eye on the pricing, though that's tougher.

What about electric?

Choosing your electricity provider is not as simple as gas; you'll need to shop around for the best price at http://www.energychoice.ohio.gov.

Take a look at your "price to compare" on the first page of your bill, which is individualized to your usage.

Remember that only about 55 percent of an electric bill, called the generation portion, is "shoppable" for customers looking for the best rate. The other 45 percent is set by regulators and cannot change.

Most communities are on an aggregation with FirstEnergy Solutions, getting 6 percent off your "price to compare" through 2018 with a $25 cancellation fee.

Betty Lin-Fisher can be reached at 330-996-3724 or blinfisher@thebeaconjournal.com. Follow her @blinfisherABJ on Twitter or http://www.facebook.com/BettyLinFisherABJ and see all her stories at http://www.ohio.com/betty

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