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Natural gas prices falling for some Ohioans depsite arctic weather

January 4, 2018 GMT

Natural gas prices falling for some Ohioans depsite arctic weather

CLEVELAND, Ohio -- Natural gas consumption has soared during the past couple of weeks of arctic weather and it’s a good bet that next month’s bill will include a built-in shudder.

Average bills are expected to rise by about $20, Columbia Gas of Ohio estimates because of the extremely cold temperatures.

Still, prices per unit of gas for some Ohio consumers are actually falling.

Dominion Energy Ohio and Columbia customers who rely on their utility’s monthly variable price are now paying, or soon will pay, less per unit of gas they burn this month than they did in December.

And they are paying less than they did a year ago, in January 2017.

These are consumers who have chosen not to sign contracts with independent gas suppliers, most of which do not offer prices that have been consistently as low as the utility-managed prices.

These consumers instead are enrolled in their utility’s “standard choice offer” or SCO.

SCO customers are actually buying the gas from a number of independent suppliers that have competed to be in the program through an auction and have agreed to charge the price set by the utility in conjunction with the Public Utilities Commission of Ohio.

SCO prices and contract prices can be found on the PUCO’s Apples to Apples website.

Dominion’s SCO customers have seen the lowest prices in the state because Dominion’s pipelines move a lot of Ohio shale gas and because Dominion owns its own in-state storage.

The price of gas under Dominion’s SCO will fall to $2.74 per 1,000 cubic feet (1 Mcf) on Jan. 16 and remain at that level through the middle of February.

Dominion’s current December-January gas price is $3.07 per Mcf. The average residential demand during a typical January alone is about 18 Mcf.

Columbia charges by the 100 cubic feet, or Ccf. Columbia’s January price, set Jan. 2 through Jan. 30, is $0.41880 per Ccf. ($4.18 per Mcf, using Dominion’s system.)

Columbia’s December SCO price was $0.45240 per Ccf ($4.52 per Mcf).

Here’s a recap of the how the SCO system works.

The SCO monthly variable prices are linked to the price of natural gas set at the end of each month on the New York Mercantile Exchange, where gas is traded just like oil.

In other words, the consumer SCO prices are “market-based,” and the low prices continue to reflect the enormous supplies of gas that have been created by shale gas production.

Even this week’s federal storage estimate showing a record storage drop of more 206 billion cubic feet barely affected NYMEX prices for February.

Ohio is a good case in point. Dominion said gas deliveries in the state were running 42 percent to 54 percent higher during the first three days of this month than year-ago levels.