Columbia Gas Customers Paid More After Choice
Consumers in Columbia Gas of Ohio territory have paid more, not less, since being offered a choice of natural-gas carriers under utility deregulation, a newspaper reported Sunday.
The Columbus Dispatch reported that newly disclosed data showed that those who selected their own gas provider paid a combined $885 million more since 1997 by shopping than they would have by sticking with regulated prices. Ohio's gas choice program was launched in 1997.
The data was released last week in a regulatory case before the Public Utilities Commission of Ohio that could lead to regulated prices being abolished. The comparison data covers the period from April 1997 to September 2012.
Customers fared best in the late 1990s, when the concept of choosing a provider was new, the report said. Many people chose fixed-rate gas contracts as an alternative to Columbia's variable rate. But over time, as the market developed, customers did worse.
Consumer advocates said the figures showed consumers haven't had enough information to make smart decisions.
"You have to wonder whether the whole setup is ever going to be able to deliver the kinds of benefits for customers that were promised," said Dayton-area attorney Ellis Jacobs, who represents utility consumers.
Deregulation supporters said the figures don't reflect how competition drove down even regulated prices and don't take into account the special products, such as fixed-rate gas contracts, that aren't available at regulated prices.
"Aggregating the number does not give the whole picture," said Bethany Ruhe, a spokeswoman for Houston-based Direct Energy.
Customers "have literally saved hundreds of millions of dollars ... because of the existence of the competitive market," said Vince Parisi, general counsel for IGS Energy in Dublin.
Both Direct Energy and IGS market unregulated gas contracts in Columbia territory.
Columbia spokesman Ken Stammen said customers are still responsible for making good decisions in a competitive marketplace.
"?Choice offers the opportunity of savings but not the guarantee of savings," he said.
Ohio State University energy economist Matthew Lewis said consumers might choose options that aren't in their financial interest out of fear of price increases or complacency.
According to the PUCO, about 40 percent of Columbia's 1.3 million residential and business customers are on "choice" contracts. The rest either pay the regulated price or receive low-income assistance. All Columbia customers paid regulated prices before 1997.
Clarence Rogers Jr. of Cleveland, a PUCO board member from 2001 to 2006, said the new figures should be of concern to Ohio regulators.
"The general belief was that customers would save money," he said.
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