FirstEnergy marketing gas in Ohio

Columbia Gas of Ohio, an affiliate of Columbia Energy Group, warned retail gas customers in that state to expect gas bills to jump a whopping 36% on average this winter. FirstEnergy Corp.�s unregulated unit which mostly markets electricity on the retail side is marketing gas in Columbia�s territory at a rate of $5.75/Mcf based on a 1-year contract.


Columbia Gas of Ohio, an affiliate of Columbia Energy Group, warned retail gas customers in that state to expect gas bills to jump a whopping 36% on average this winter.

The gas distribution utility has been telling customers for months to expect higher bills because of the natural gas price increases but until today the company did not know how much higher, says Steve Jablonski, spokesman for Columbia Gas. The company estimates that the average residential customer using 10 Mcf of gas will pay about $101 a month opposed to $74 last year. Columbia is allowed to pass the cost of gas through to customers.

Columbia can adjust bills every 3 months to recover the cost of gas. To lower costs or even lock in a rate, the company suggests that customers participate in its retail choice program and shop around for competitive suppliers of natural gas. The choice program for retail natural gas in effect since 1997 has attracted 30 competitive suppliers offering product, says Jablonski.

�So far, out of 1.2 million customers we have lost 500,000 to other suppliers,� he says.

Some of the deals appear attractive.

FirstEnergy Corp.�s unregulated unit which mostly markets electricity on the retail side is marketing gas in Columbia�s territory at a rate of $5.75/Mcf based on a 1-year contract. That�s roughly half the cost of Columbia gas. The Akron-based electric utility has also just started marketing gas in the East Ohio Gas program with an introductory offering of $5.43/Mcf for a 1-year contract or $4.91/Mcf for a 3-year contract.

�We are offering gas 30% below what the utility can pass through costs to customers in the East Ohio program,� says Ellen Raines, spokeswoman for FirstEnergy. �We are doing what any competitive business would do in a recently opened competitive market. We have contracts with gas suppliers that allow us to offer competitive prices.�

Even though FirstEnergy is a large diversified electric and gas utility with an unregulated marketing side, there are smaller players who have entered the market and whose delivery of gas is no guaranteed thing.

Already EnergyMax of Northeast Ohio Inc. failed to deliver gas to 8,000 customers just two weeks ago. Those customers were returned to Columbia Gas since it is the provider of last resort.

Robert Skaggs Jr., president and CEO of Columbia Gas of Ohio, said at a recent conference in Ohio that the company is on target for gas supply for the winter. Storage is full. The utility gets 66% of its gas supply for the winter from storage. The rest comes from long-term contracts and the spot market.

Jablonski says the utility is not worried about supplying additional customers in the event that a competitive supplier fails to perform.

�We don�t see that as a problem,� he says. �We are under obligation to serve, if they come back and we will.�

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