The major components of natural gas bills in Ohio are the price of the natural gas product and the price for the transportation and delivery of that natural gas. In some cases, the supply of natural gas and the delivery of natural gas are performed by different companies, a supplier and a local distribution company.
Beginning in 2001, consumers in Ohio became eligible to choose or “shop” for the energy supply of their bill. Ohio has since established an energy choice program, allowing customers to compare current natural gas prices among all certified suppliers. Eligible Ohioans who “shop” effectively choose a supplier to provide natural gas to their local distribution company who ensures delivery of natural gas to homes and businesses.
Local distribution companies deliver natural gas to all customers, offer payment plans and respond to emergency calls. You should call your local distribution company if you experience a disruption of service.
What is the standard choice offer and how is it established?
The standard choice offer (SCO) is the default rate for natural gas charged to a choice-eligible customer who decides not to shop for a competitive supplier. The SCO is comprised of two components, the price of the natural gas commodity, as established by the NYMEX month-end settlement price, and the cost of delivering natural gas to customers, known as the retail price adjustment.
The NYMEX functions like a stock market for commodities, such as coal, oil and gasoline. The price of the commodities fluctuates each day and on the third business day from the end of the previous month, the price of natural gas is captured, and the resulting price is known as the NYMEX month-end settlement price.
In order to secure natural gas for the SCO rate, local distribution companies conduct competitive auctions where suppliers bid on the opportunity to deliver natural gas to local distribution companies. The resulting price of the auctions is the retail price adjustment. This represents the winning suppliers’ costs to deliver the gas to the location distribution company’s system.
The two components establish the SCO rate, which changes monthly based on the NYMEX month-end settlement price for natural gas.
The SCO is the default rate for all customers* of Dominion Energy Ohio, Columbia Gas of Ohio and Vectren Energy Delivery of Ohio.
What is the NYMEX?
The NYMEX, or New York Mercantile Exchange, functions like a stock market for commodities, such as coal, oil and gasoline. The market sets a daily national price for natural gas. Demand for natural gas is seasonal, and the NYMEX price can change dramatically from one month to the next. Variables including supply and demand and the weather can cause prices to fluctuate. The NYMEX month-end settlement price is an average of natural gas prices from the previous month.
What is the standard service offer for natural gas?
The standard service offer (SSO) rate is the same as the SCO rate. Customers who decide to return to their distribution utility’s SCO or opt out of a government aggregation program are placed on the SSO for a short transition period, typically one to two billing cycles. This transition period is a necessary for administrative purposes to allow the local distribution utility and supplier to accurately transfer account information.
If I selected a supplier but do not wish to renew my contract, how can I return to the SCO?
To return to your distribution utility’s SCO rate, contact either your current energy supplier or your natural gas distribution utility and ask to be returned to your utility’s SCO rate. Prior to returning to the SCO, review the terms of your contract as there may be an early termination fee.
Where can I find my company’s SCO rate?
There are a few places to find the SCO rate. The SCO rate is available on your natural gas bill and regulated distribution companies are required to have a resource explaining each component of your bill on their website. The SCO can also be found on the PUCO’s Energy Choice Ohio website. You can also receive text alerts from the PUCO when the SCO changes. Click here to sign up.
How do I know if I am eligible to participate in energy choice program?
Customers of most PUCO-regulated natural gas distribution utilities, except for those who participate in the Percentage of Income Payment Plan Plus (PIPP), are eligible to participate in the energy choice program. If you are unsure of your status, contact your local distribution utility or call the PUCO Call Center at (800) 686-PUCO (7826).
Municipal and co-operative utilities are not regulated by the PUCO and therefore do not participate in energy choice.
*The MRR is the default rate for Dominion’s non-residential customers using 200 Mcf or more annually.