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Published: Thursday, 12/14/2006

Bid process for supplies urged for utility firm

BY GARY T. PAKULSKI
BLADE BUSINESS WRITER

The Public Utilities Commission of Ohio is being asked to order Columbia Gas of Ohio to use an auction to obtain the natural gas it supplies to customers.

The Ohio Consumers' Counsel, an advocate for the state's residential utility users, will push the proposal tomorrow in Columbus at a previously scheduled PUCO hearing on Columbia's rate-setting practices.

"We're hopeful this could result in savings for customers," Janine Midgen-Ostrander, the consumers' counsel, said yesterday.

An auction has been used successfully in eastern Ohio since October by Dominion East Ohio, she said. Customers of that utility will save about $100 annually with the process, Ms. Migden-Ostrander added.

The proposal would affect only Columbia Gas customers only and not those who buy gas from alternative suppliers under Ohio's customer choice plan.

In the PUCO-supervised Dominion auction, the winning bidder agreed to sell gas at a prevailing market rate plus 14.4 cents per hundred cubic feet of gas.

Dominon previously had charged customers the market rate plus 23.7 cents per hundred cubic feet.

Columbia Gas customers pay about 26 cents per hundred cubic feet over market rate, which is based on trading on the New York Mercantile Exchange.

Rates do not include fees Columbia Gas and other utilities are allowed to charge for delivery and other services.

Chris Kozak, a Columbia gas spokesman in Toledo, said the utility is undecided whether it will voluntarily agree to the proposal.

"We're watching the Dominion process closely," he said. "Early results are promising to consumers, but it is too early to draw any conclusions."

If adopted, the proposal would affect just 34,000 of the utility's 173,000 customers in northwest Ohio because 80 percent of households here participate in the customer choice plan, Mr. Kozak said.

However, an auction would have a big impact elsewhere in Ohio because overall participation in customer choice is 43 percent, he added.

Contact Gary T. Pakulski at: gpakulski@theblade.com or 419-724-6082.



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