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02-16-06 Gas prices falling but not for Celina program’s members

By Tim Cox

  Market prices for natural gas continue to tumble as customers enrolled in Celina's aggregation program face a steep increase for natural gas beginning March 1.

  Celina is in the middle of a two-year contract with Direct Energy to supply gas to customers who decided to participate in the aggregation program. The price for the first year was $8.38 per MCF, which ends Feb. 28. For the second year, city officials locked in a price of $13.27 per thousand cubic feet of gas in mid-December, just as market prices were pushing toward all-time highs.

  But then in January, mild winter weather across most of the nation sent natural gas prices falling -- to a market low of $7.50 per MCF this week.

  Celina customers are allowed to leave the Direct Energy contract with no financial penalty, and city officials are urging customers to lock in to a lower price if they can find one.

  Even though current market prices are at $7.50 per MCF, no available suppliers have dropped their rates that low yet. Suppliers eventually will drop their prices if market prices remain low.  Direct Energy officials say their program offers price stability through the next winter and could help customers avoid a sharp run-up in energy prices.

  "Wholesale natural gas prices have risen and fallen dramatically in the last year, but our customers have been able to budget for their heating costs, and they still will be able to do so, thus eliminating the uncertainty of volatile energy markets," said Mike Beck, Direct Energy's vice president of sales and marketing.

  Even though Celina customers enrolled in the aggregation program will see a nearly 60 percent hike in gas prices beginning in March, the price currently remains competitive with what other suppliers are offering.

  Based on the "apples to apples" price comparison chart maintained by the Public Utilities Commission of Ohio, suppliers now are offering fixed prices in the $12 to $14 range. Some have slightly lower monthly variable rates that are subject to climb or fall depending on market conditions. Also, to lock into a fixed price, most companies require a two-year contract that includes penalties for leaving the program early.

  Residential customers automatically are included in with the city contract, unless they sign a form saying they want out. If they choose to opt out of the city's deal, customers can remain either with local supplier Dominion or find their own deal from another company.

  The issue was briefly discussed at this week's Celina City Council meeting. Councilman Ed Jeffries said he signed a two-year deal with Interstate Gas Supply for a fixed price of $12.89 per MCF.

  Safety-Service Director Jeff Hazel, who made the decision in December to lock in at the $13.27 price, told Jeffries that he and all residents should lock in to a better deal if they can find one.

  However, Jeffries noted that there is a $150 penalty for leaving the Interstate Gas Supply contract before the two-year term expires.

  Businesses are not eligible to participate in the city's negotiated contract and are left paying Dominion's current rate of $12.50 per MCF, which becomes about $15.32 after taxes and transportation charges are tacked on.

  Taxes and delivery charges also apply to the gas cost no matter which company provides the gas. Dominion continues to deliver all natural gas and provide emergency service along its lines.


Phone: (419)586-2371,   Fax: (419)586-6271
All content copyright 2006
The Standard Printing Company
P.O. Box 140, Celina, OH 45822