Ohio cities to end natural gas purchasing initiative

Michael Giberson

Via Tim Haab at Environmental Economics, a news story from The Columbus Dispatch reporting that five Columbus suburbs were ending a program in which the communities bought gas on behalf of residents that didn’t opt for another supplier.

“There’s really not a need for government to be in it,” said Dana McDaniel, Dublin’s assistant city manager, who announced the decision yesterday.

In May, The Dispatch reported that the group’s prices were often higher than those of Columbia Gas of Ohio, the regulated utility. The fixed price was set each year and stayed the same for 12 months, while Columbia’s price changed every month.

Some residents had voiced concerns that the group’s fixed-rate prices were too high and that the opt-out system for enrollment was confusing.

One of those residents, Barbara Drobnick of Gahanna, withdrew from the program in December after finding out that she had been automatically enrolled. Yesterday, she said she was pleased to hear the program was being discontinued.

“I like that they’ll be doing what cities are supposed to do, rather than making deals with private companies on my behalf,” she said.

More:

Since the consortium began in 2005, its price was higher than Columbia’s in 43 out of 63 months, according to a Dispatch analysis of pricing and consumption data. Customers who had the city group plan that entire time and had average gas usage would have paid nearly $800 more than if they had gone with the utility.

It is a bit unfair, as McDaniel said later in the article, to compare the 12-month fixed rate price in the program to monthly variable price deals offered by Columbia.  A fairer comparison would look at what other 12-month fixed rate plans were offering at the same time the five-city group renegotiated each next year’s rate.

But I tend to agree with the McDaniel’s line quoted above, “There’s really not a need for government to be in it.”