Natural gas customers bewildered

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Published Monday, September 18, 2000, in the Akron Beacon Journal.

Natural gas customers bewildered Companies bombard residents with sales pitches amid deregulation. Prices will rise no matter what BY JIM MACKINNON Beacon Journal business writer

Natural gas marketers are hitting Northeast Ohio residents with blitzes that would make the Cleveland Browns proud.

The sales pitches, claiming you'll save money, come by mail and appear in print and electronic advertising. At least one company has salespeople going door to door.

They all pretty much want the same thing: to have you sign a contract to buy natural gas from them at either a fixed or variable rate.

For Harding Wichert, that means almost daily mail from companies he has never heard of trying to sell him natural gas at various prices.

``I'm so confused. I think it's ridiculous,'' he said. ``I don't know what I'm going to do.''

The Cuyahoga Falls resident, who said he needs advice, is far from alone.

The confusion stems from Ohio's deregulation of the gas industry, which started as pilot projects in 1997 and now encompasses much of the state. Complicating things is that the Energy Choice program has arrived in Northeast Ohio just as natural gas prices are skyrocketing nationwide because of limited supply and increased demand.

Those prices apparently will soon increase again. Dominion East Ohio, formerly East Ohio Gas, says it plans to file a request with the state tomorrow for another rate increase, on top of the 43.5 percent in increases already granted in the last several months.

Nationally, natural gas prices are about double what they were a year ago.

Now toss in Ohio's deregulation program, which means that you, Mr., Mrs., Miss or Ms. Natural Gas Customer, need to figure out whom you want to supply you with gas and at what price. You choose. No one else makes the decision.

You're basically on your own.

Fortunately, help is available in sorting out the myriad options.

The Public Utilities Commission of Ohio prints a free ``Apples to Apples'' chart that compares the latest gas rates offered by Dominion East Ohio with those of other approved gas suppliers. The PUCO says it updates the chart as gas prices change and more suppliers come into the market.

The PUCO says it is getting hundreds of calls daily for the chart, which is also available for free from the commission's Web site. The chart warns that individuals' actual costs will be different.

The Ohio Consumers' Counsel, a state-funded advocate for residents for utility issues, also offers advice and, sometime in October, will have Web- and telephone-based calculators to help Dominion East Ohio customers figure out how much gas supplied by the various plans would cost them.

The advocacy group already has those calculators for customers in the Columbia Gas and Cincinnati Gas & Electric districts. The office says it feels the more personalized information is more accurate than the PUCO's comparison chart.

``We have tons of tips for folks,'' said Robert Tongren, the Consumers' Counsel. Tongren, who lives in the Columbus area, said he just changed natural gas suppliers, signing a one-year, fixed-rate contract for his residence. He declined to say with whom.

``People are signing contracts now,'' he said. ``They need to look at that contract, read the fine print. Read everything. Use a magnifying glass if necessary.''

Tongren, the PUCO and others offer these general tips to help sort out the best plan for you:

Ask lots of questions of the suppliers. The PUCO and Dominion East Ohio have a list of questions to ask.

Don't rush into signing a contract. There is no official deadline to get a supplier, although companies may set deadlines for you to get gas at a specific rate. People can start signing up with suppliers as of Oct. 1.

Get a copy of the PUCO's free comparison chart. Bear in mind that the Ohio Consumers' Counsel, the PUCO and Dominion East Ohio will not recommend specific gas suppliers to you.

``It would be absolutely wrong for me to do that,'' Tongren said. ``It is really an individual customer decision. You go with someone you feel comfortable with. There may be more to this decision than just price.''

Should one of the new suppliers go out of business or otherwise leave the market, the PUCO and others said customers should see no disruption of gas service.

People need to use good judgment when selecting a marketer, said Edith Binford, a PUCO utility specialist.

``I wouldn't treat them (gas marketers) any different than if I was buying a house,'' she said. ``Be savvy. . . . I would never rush into any kind of contractual obligation. Take your time and make your choice. I would never be pressured into making any kind of quick decision.''

Or don't make a choice. You can keep Dominion East Ohio as your supplier if you want, said company spokesman Neil Durbin. But people who do their homework may find that they can save money, he said.

Dominion East Ohio's call center has seen the volume of daily calls increase by 15 percent to 20 percent since Sept. 7, when a lot of people in the greater Akron area began getting mail solicitations.

Dominion East Ohio will still deliver the natural gas -- no matter the source -- to its 1.2 million customers, Durbin said. The Cleveland company buys the gas from its approved suppliers; that gas gets mixed into its underground storage facility and is pumped out.

Dominion East Ohio is forbidden by law from making a profit on the cost of natural gas -- it simply passes along any wholesale increases or decreases to customers. The company doesn't care where you buy the gas because it makes its money on the distribution of gas. The more gas residences and businesses burn, the more money Dominion East Ohio makes.

Energy America, a joint venture of Sempra Energy in California and Canada's Direct Energy Marketing Ltd., sent 48 salespeople door to door starting Sept. 11 in Northeast Ohio trying to sign people to a fixed-rate, five-year contract. The company's big selling point: signing up now caps the risk should prices rise.

``We'll talk to anyone who will answer the door,'' said company President David Zeitz. The Stamford, Conn.-based company feels it can still make money if people sign up for a fixed rate now and natural gas prices continue to rise, he said.

``We've already bought product,'' he said. ``Down the road, we may have a new price level.''

Energy America entered the Ohio gas market in 1998 when it began selling gas in the deregulated Columbia Gas territory, where it says it has 80,000 customers.

Vic Wlaszyn, who heads the Better Business Bureau of Akron, advised people not to go immediately for a long-term commitment. ``Do the most homework you can,'' he said.

If ever there was a time to shop for gas, this is it, said Tongren. If the sharp increase in natural gas prices is combined with a normal cold winter, ``we're going to get whacked,'' he said.

People need to develop confidence in their ability to make decisions about natural gas and, starting in January, electricity, Tongren said. ``Economic democracy, that's what this is all about,'' he said. http://rd.yahoo.com/dailynews/knightridder/*http://www.ohio.com/aol/aolnf/003736.htm

-- Martin Thompson (mthom1927@aol.com), September 18, 2000


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