Sunday, October 16, 2011

Natural Gas Aggregation

Glendale Natural Gas Aggregation Exposed

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:

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.)

And the consequences can be huge as natural gas can be volatile when business is booming. The swings can be in the thousands of dollars for a big old residential home in Glendale over a given year when one looks back.

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 when natural gas plunged, as it will do this coming year. Check out “Gearino…Columbia Gas…Columbus Dispatch” on Google.

• 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 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.)

• 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 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,