Friday, October 21, 2011

Aggregation for Glendale -- Don't Sign Up; Get Out; Opt Out!

On Oct 18, 2011, at 11:10 AM, F BRUCE ABEL wrote:

There will be a presentation Wednesday at 10 am at the Lyceum library.



Sent: Sunday, October 16, 2011 1:04 PM

Subject: Glendale Natural Gas Aggregation Email That Came Around Friday--Stop Everything!

Glendale Natural Gas Aggregation Exposed

Would you distribute this to as many as possible.

This inquiry came from a friend in Glendale in response to the Village Notice of Friday:

Bruce - Goodness, I really hate to bother you w/ this, but I can't make head

> nor tail of our bills.

> Are we on this, do you remember? Do I need to get on it if we're not?

> Think I'd decided to just pay & not worry about it, since you spent a whole

> day on this last year & didn't find anything wrong. Thank you again for

> that...

My answer, some of which I also put on Facebook:

Aggregation can be good, but…the cherry-picking presentation can hurt.

About that “$5.58” and the “$6.18.” Don’t be misled. It’s like taking the highest price and comparing the proposed new set rate to that. There is a lot of "puffing" and misleading going on in this realm so it's not easy to analyze. Towns, not having the in-house expertise, put out the wording (such as below) prepared by the natural gas broker and the misleading is rampant and outrageous. This is a good example of local government gone wild, gambling with the citizen’s money without even knowing it! (Note: The electric aggregation so far worked very well, as I recommended a year ago doing it when I saw that Duke was pretty likely not to lower their electric rates, after first analyzing it with a jaundiced eye.)

And the consequences can be huge to sign up for a fixed contract at such a high price! For a time period that does not even cover November or December, 2001’s usage. Natural gas can be volatile and high when business is booming. But we are years away from returning to the economic environment we had in 2004-2007. Since that time an infinite amount of natural gas has been uncovered in Ohio, Pennsylvania, etc., let alone the Wall Street fiasco.

Signing up for such a high fixed rate can cost thousands of dollars for a big old residential home in Glendale over a given year when one looks back. The real loss will occur next November and December under Glendale’s aggregation program. But even now it’s higher than Duke’s October rate.

Upper Arlington and others in Columbus locked into a “good deal” with Columbia Gas and citizens took a huge hit over the next couple of years, sometimes $600/month during the winter months, when natural gas plunged, as it will do this coming year. Check out “Gearino…Columbia Gas…Columbus Dispatch” on Google. Better,

• Usually what to do is a guess and the information given to us by the Glendale email isn't worth a crap as I will begin to demonstrate.

• We are less than 15 days from the beginning of the winter heating season and there is little time to get answers! Why such poor planning? Get off the natural gas aggregation if you are now on it. Go back to Duke and clear the air before committing to a competitor again. At least until we can get an impartial analysis.

[I’m going to set up a presentation at the Lyceum Wednesday morning at 10 am (if Cindy gives the go-ahead) and people should bring their last Duke utility bill and a copy for me to work with. And I’ll try to have Don Marshall be there as well. And somebody from Duke and somebody from Duke Retail. Anybody from the Village administration would be welcome but essentially worthless. Having said this we did save some money – not what the blurb this summer stated -- on the electric aggregation which I analyzed a year ago with a jaundiced eye and recommended people go for it. Not so with natural gas, and my prediction proved correct, as implied by the village notice below.]

Some off the top (my commentary) on the Village’s email announcement which appears below my commentary:

• "Beginning January 2012." What does that mean? January USAGE? January's BILL, which would include December's usage? In either case it includes only part of this winter and mainly locks us into rates for next winter, which is way too far into the future.

• What is missing is what Duke's MOST RECENT MONTHLY RATE is and what Duke projects for the next five months. What is given is an irrelevant "price in effect for this year."

• The only "good deal" would be if the negotiated rate is "10% below whatever the Duke rate is each month starting NOW," then it's a good deal.

• Duke's rate will go down more than 10% as the year goes on, and is already, on an apples-to-apples basis, below “$6.10.” (Reminder: “$6.10” is only a shorthand for a certain part of the bill. Do the following before you come to the meeting: divide your total natural gas dollars by total ccf, for the last 12 months. You’ll find that you’ve been paying more than $6.10 for every month; so the “good deal” $5.58 is equally shorthand.) For example, I average 100 ccf for my house and my actual cost per ccf is over $10.

• If you opted out of Glendale’s natural gas aggregation a year ago as I did, I would opt out again, as you suggest.

• If you opted in, you should now go back to Duke Energy, pending further inquiry.

• Remember, the only months of note are usage for November, December, January, February and March. The rest is good ol’ summertime.

> The following is from the village on Friday, circulated by email. It

> -----Original Message-----

> From: Glendale

> Sent: Friday, October 14, 2011 7:14 PM

> To: Glendale Subscriber





> The Village Council has negotiated a lower rate for natural gas applicable

> to the Village natural gas aggregation program. Beginning January 2012, the

> aggregation rate for Village residents will be lower by ten percent compared

> to the price that was in effect during this year. The rate for 2011 has

> been $6.18 per 1000 cubic feet and will decrease to $5.58 for next year.

> That means that residents will realize about a $12 per month savings during

> the up-coming winter heating months from what they paid this year. And while

> annual savings have not been as great as originally projected, residents did

> realize lower winter heating bills during this past January and February.


> Most Village residents have already joined the aggregation program, but

> those who have not can still enroll at no cost. The rate is fixed compared

> to Duke’s rate that changes monthly. If there are any concerns about the

> aggregation program once a resident enrolls, the customer may leave the

> program at any time without paying a penalty. If a resident is currently

> participating in the aggregation program, then that resident needs to take

> no action to benefit from the lower rate beginning in January.