If you missed it, I recently wrote a brief update on the latest February natural gas price for Dominion Energy Ohio, which rebounded after a temporary reprieve in January.
Price spike: February Dominion natural gas prices soar after January reprieve
I promised in a column last month when the price of natural gas in January was significantly lower after prices started to skyrocket last fall that I would keep an eye on prices and update you again .
So here’s some updated information and advice if you haven’t been able to lock in a cheaper price this fall or are wondering what to do next.
Catch me, what happened?
For several years, many benefited from Dominion Energy Ohio’s monthly rate set by auction with a state-approved formula called the Standard Choice Offer or SCO. The SCO is supposed to be a “default” rate for people who don’t choose their own rates, but for years these rates were approaching low wholesale rates, so I recommended choosing the SCO. We saved a lot of money.
But last fall, prices started to rise and experts were predicting that prices would skyrocket next year and could drop by the end of 2022. I suggested people leave the SCO and find a good fixed rate and assess all government aggregation groups. I was not in favor of the Akron rate, which was going to mirror SCO’s higher rates until May 2022 before returning to a fixed rate.
Prices soared from $3.77 per thousand cubic feet (mcf) in July to $5.99/mcf in October. November was the highest at $6.35/mcf and December at $5.60/mcf.
Then, the January rate settled at $4.17/mcf.
Ella Hochstetler, Dominion Energy Ohio’s new director of regulation and pricing, said several factors were behind January’s rate cut, including increased gas production and storage and a mild winter.
I still suggested that people could lock in on a decent rate in the $4/mcf range or reassess their aggregation rates and wait and see what the February rate did because it takes two months to that a change is completed.
Natural gas: Betty Lin-Fisher: Take stock of prices with natural gas price crash in January
Natural gas prices soar in February
The price of SCO, effective with invoices generated after Feb. 11, increased to $6.42/mcf when rounded to the nearest cent. This is an increase of nearly 54% from the January SCO rate of $4.17/mcf.
The increase follows a weather report in late January that predicted colder-than-normal temperatures for 10 days as far south as Texas, Hochstetler said.
“Fears of an event like last year’s polar vortex event probably contributed in a major way to this market reaction,” she said. “That, coupled with significant storage inventory drawdowns this heating season, has been the main driver. Since then, future prices have normalized between $4 and $5.”
Alright, so what do I do?
If you locked in a better rate in the fall, you should be in good shape.
If not, here are some tips, depending on your situation:
If you’re still on the SCO or a price based on the SCO, you’ve definitely had your ups and downs. If you want to lock yourself into a fixed rate now, Mercury’s rate of $4.58/mcf for 24 months that I mentioned in the January column is still the cheapest fixed rate with no cancellation fees.
There are others that are slightly cheaper and for different durations, but they have cancellation fees, so it’s up to you.
You might not want to stay for 24 months if prices drop, but there are no cancellation fees. Be sure to read the fine print. You can go to https://mercuryenergyohio.com/dominion-energy-ohio-res/ for pricing, if still available, or follow the links from PUCO’s Energy Choice site at http://www.energychoice.ohio.gov or call Mercury at 800-975-6372.
Prices change, especially when the market changes. If that rate is no longer available, look for another good fixed rate with little or no cancellation fees. Watch out for very low “introductory rates” or if you take one, mark your calendar to stay on top of a renewal rate so you won’t be surprised later.
If you are on a government aggregation or bulk purchase contract, check the prices to see your options.
If you live in a NOPEC community, which represents much of the Akron area, the default or standard NOPEC rate is $5.23/mcf. NOPEC also has 12-month and 24-month fixed contracts that you can request ($4.44/mcf and $4.25/mcf, as of the start of this week).
The City of Akron Gas Schedule was $3.09/mcf through November 2021 and would closely mirror the SCO from December 2021 through April before becoming a fixed rate of $4.06/mcf from May 2022 to November 2024.
If you’re on the Akron program, you paid a high rate in December and now February and got a reprieve in January. It takes up to two months for a gas switch to take effect, so even if you switched to a different fixed rate now, you wouldn’t see the savings until April and the new rate of $4.06/mcf starts in may. You may just have to hold your breath for monthly prices from February to April until you can get to May as this price is now cheaper than fixed rate contracts and reassess again later if prices global natural gas prices are falling.
Going forward, I’ll keep an eye on prices and often update my online utility guide, which contains lots of monthly information on natural gas and electricity prices. Which can be found on www.tinyurl.com/UtilityGuide. If there is another major swing I will update with another column; otherwise, I usually update the utility guide with the monthly SCO and other tips.
Beacon Journal reporter Betty Lin-Fisher can be reached at 330-996-3724 or [email protected] Follow her @blinfisherABJ on Twitter or www.facebook.com/BettyLinFisherABJ To see her most recent stories and columns, go to www.tinyurl.com/bettylinfisher