The formula used for Dominion East Ohio customers who buy their natural gas at the Standard Choice Offer rate this spring will fall to unprecedented numbers -- a negative five cents below wholesale rates.
The Standard Choice Offer, also known as the SCO, is the monthly variable price set by a state-approved formula and offered by suppliers who bid in a yearly Dominion East Ohio auction.
The SCO is determined monthly by using the closing price on the third to laslt day of the previous month on the New York Mercantile Exchange (NYMEX) plus the "adder."
Last year, the "adder" price was already at a historic low of 2 cents per thousand cubic feet (mcf).
On Wednesday, the Public Utilities Commission of Ohio (PUCO) approved the auction results, which ended in a negative 5 cents/mcf, so the SCO will be determined using the NYMEX, or wholesale price minus 5 cents/mcf.
The new formula will be effective April 1 through March 31 of 2017.
"Our February 2 auction result is incredible and a testament to a number of factors,” noted Jeff Murphy, Dominion East Ohio vice president and general manager. “First and foremost is the abundant production from the Utica and Marcellus shale formations that has totally reshaped the nation's natural gas marketplace, and this region's in particular. Secondly, the suppliers vying for the right to serve that portion of our market bring a tremendous amount of expertise to delivering competitively priced natural gas reliably to our system. Lastly, the other stakeholders in our auction - most notably the Public Utilities Commission of Ohio (PUCO) Staff - have helped us structure a very competitive approach to the process.
"Dominion has been - and continues to be - a leader in the drive to make natural gas markets more competitive, and our customers have benefited greatly as a result. Natural gas suppliers, competing to serve our more than 1 million customers, offer a wide range of options and have demonstrated their ability to provide reliable supplies, even during the record-setting weather experienced over the last several winters. We're grateful for all those involved and the rapid approval of our auction results by the PUCO," Murphy said.
Customers assigned to an SCO supplier are free at any time to enroll with a different Energy Choice supplier or participate in an aggregation program. SCO customers can evaluate their options at www.dominiongaschoice.com, which provides interactive, one-stop shopping information.
For a detailed column on how to switch to the SCO by Beacon Journal consumer columnist Betty Lin-Fisher, go to www.tinyurl.com/bettynatgas