Gas group inks deal to cut bills

Members of NW Ohio coalition to see $20-25 savings this winter

8/31/2013

Officials of the Northwest Ohio Aggregation Coalition have negotiated a contract with IGS Energy that potentially could save residents of the buying group’s 10 member communities between $20 and $25 each this winter on heating bills.

The 75,000 residents in the coalition began getting postcards this week informing them of the deal and their right to opt out of it if they wish to find another supplier or they have a contract with a different supplier.

“You can also get out of this later, or if your contract ends during the winter, you can contact IGS to get in. Or if you find a better deal later on, say, on Dec. 10, you have the ability to get out of this deal at no charge,” said Mark Frye, a consultant with Palmer Energy Group of Toledo who advises the aggregation coalition.

Under Ohio law, communities can band together to form buying groups, known as aggregations, to negotiate better gas or electric rates than an individual could get.

The Northwest Ohio Aggregation Coalition, better known as NOAC, represents all customers in Toledo, Maumee, Northwood, Oregon, Sylvania, Perrysburg, Holland, Lake Township, Ottawa Hills, and all unincorporated areas of Lucas County. Perrysburg Township was in the coalition last winter but left to strike its own gas deal with Volunteer Energy Services in July.

NOAC’s new contract with IGS takes effect Oct. 1 and runs through the end of March, 2014. It provides coalition members with a residential rate that is about 2.6 cents per hundred cubic feet below Columbia Gas of Ohio Inc.’s monthly rate.

Both Columbia Gas and IGS’ gas costs are tied to the Nymex commodity market, but while Columbia Gas will charge customers an added 13 cents for handling and transmitting gas, IGS will charge about 10.4 cents.

Mr. Frye said that will equal a savings of about $20 to $25 for the average household that uses about 200 hundred cubic feet of gas per month from October through March.

IGS’ rate is the lowest rate ever negotiated by NOAC, and a possibility remains the rate could go lower.

“At this point, it’s guaranteed to be no more than [10.4 cents]. I think we’re going to be able to do better than [10.4], but I’m not positive,” Mr. Frye said.

Leslie Kovacik, the city of Toledo attorney who represents the aggregation coalition in contract negotiations, said that when the last contract with IGS ended on April 1, the two sides left open the possibility of a new contract being offered prior to September. Either side could have walked away, she said.

“They didn’t give us a firm price then but they said, ‘We’ll commit to a really good price’ later. So we sort of agreed to do that,” she said.

“We just didn’t know the final price, but we did have a good relationship with IGS,” she added.

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.