Counsel warns of higher natural gas costs

The Ohio Consumers’Counsel is warning of higher natural gas prices if a wholesale auction process is restructured.

The OCC said natural gas customers who use default service from Columbia Gas of Ohio will see higher prices if the auction is restructured as approved recently by the Public Utilities Commission of Ohio.

The PUCO order allows independent retailers to participate in an auction early next year to set a “standard choice offer” for the price of natural gas. The retail auction will replace the current process in which Columbia purchases its wholesale supply for resale to its customers at what is called the “standard service offer” rate.

The difference between the two rates for customers, according to the OCC, is that under the standard choice offer, customers will pay more in taxes than under the service offer.

The OCC has contended that the wholesale approach has resulted in lower prices for customers and there was no reason to change a system that, in the agency’s view, is working.

During the hearing process, the OCC presented evidence that since establishing the wholesale auction in 2009, the standard service offer has consistently been one of the lowest rates offered to Columbia choice customers compared to those of retail marketers.

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