COLUMBUS, Ohio – July 31, 2008 – A customer letter sent to potentially thousands of Dominion East Ohio customers could mislead those residents into believing that the utility will stop supplying natural gas in the coming months, the Office of the Ohio Consumers’ Counsel said today. Contrary to the claims of the marketer, Dominion East Ohio Energy, customers will not be automatically switched if they do not choose a supplier. Customers still have the choice of staying with Dominion East Ohio.
The letter was sent by Dominion East Ohio Energy, an affiliate of the natural gas utility that operates as one of the alternative suppliers for Dominion customers. To further complicate matters, the affiliate used the logo of the parent company.
Attracting customers with a $25 Visa gift card, the Dominion East Ohio Energy letter states that, “If you don’t select a new provider, you will automatically be switched to another supplier. The Public Utilities Commission of Ohio ordered this significant change on June 18, 2008.”
The OCC is concerned that residential consumers will mistakenly believe that Dominion will stop providing them with the supply of natural gas and that they need to choose an alternative supplier on their own.
“The fact is that for the foreseeable future, Dominion East Ohio will continue to supply natural gas through wholesale companies to those customers who have not chosen an alternative supplier,” said Janine Migden-Ostrander, Consumers’ Counsel. “The utility has not been authorized by the Public Utilities Commission of Ohio to stop the supply function, and would first need to separately request any such move for PUCO approval.”
Currently, Dominion provides the supply of natural gas through a Standard Service Offer to the estimated 30 percent of residential customers who have not chosen an alternative supplier. This has been in place for the past two years. Dominion provides the delivery of natural gas to all customers living in its service area.
The date referred to in the Dominion letter – June 18, 2008 – is the date the PUCO approved a plan to hold additional natural gas auctions to determine the price Dominion East Ohio customers will pay as the Standard Service Offer through March 2010. This plan did not include the ability for Dominion to stop supplying natural gas.
An auction held on July 22 provided the rate from September 2008 through March 2009. The new Standard Service Offer will be $2.33 per Mcf (thousand cubic feet) plus a monthly wholesale price on the NYMEX, the New York Mercantile Exchange. Other auctions will secure rates from April 2009 through March 2010. Under the auction, wholesale suppliers will supply natural gas to Dominion East Ohio who in turn will sell the gas to customers at the Standard Service Offer rate.
Under the Standard Service Offer, customers have saved money since September 2006 over what they would have paid under the traditional Gas Cost Recovery system. The first bidding process was conducted in August 2006 and resulted in a typical customer saving $100 per year. The first auction covered a 23-month time period ending August 2008.