If you buy natural gas through Dominion East Ohio rather than through a contract with an independent supplier, your monthly gas price every month for the coming year will be a nickle lower than the national commodity price. You read that right. A nickle less than the national commodity price. You can thank Ohio's shale gas industry.
COLUMBUS, Ohio -- Dominion East Ohio gas customers are in for a bonanza of savings over the coming year if they have enrolled in Dominion's Standard Choice Offer.
Their monthly price of natural gas will be 5 cents lower than the commodity price, which is the price that gas wholesalers pay. The price is set at the end of every month for the coming month.
The discounts are the result of the regional natural gas glut that oil and gas companies have created in Ohio, Pennsylvania and West Virginia. There is so much gas here, without sufficient pipelines to move it elsewhere, that the price is lower than the national price.
Much of that surplus gas flows into Dominion's extensive in-state pipeline system, making it easy for wholesale suppliers to buy and re-sell it. And they are not paying national commodity prices.
Here is how the system works:
Dominion's current Standard Choice Offer, or SCO, rate is determined by adding 2 cents to the national commodity price.
For example, the natural gas national commodity price this month is $2.189 for about 1,000 cubic feet, or 1 Mcf, of gas. Dominion's consumer SCO price is $2.209 per Mcf.
Under the new formula, the consumer price would be $2.139 per Mcf.
The Public Utilities Commission of Ohio set the new formula, without comment, on Wednesday. The discount rate begins April 1 and runs through March 31, 2017.
The new formula is based on the results of a PUCO-monitored auction held Tuesday in which seven wholesale suppliers competed to supply Dominion's SCO customers.
The PUCO withheld release of the winning companies for 15 days in order to allow them to contract for the enormous amounts of gas they will supply.