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Ohio electric and natural gas market structures

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I want to take some time to outline the electric and natural gas market structures in Ohio. I hope this will paint a broader picture of The Buckeye State’s energy markets and their recent changes.

Ohio Electric Market Structure
Each utility creates a new Electric Security Plan (ESP) every three years determining the price and structure for utility supply. Suppliers such as Direct Energy must beat or improve this price and structure its customers. Most Ohio electric utilities have approved plans until 2015, and therefore, many electric offers from retail suppliers typically extend until June 2015. New plans will begin to be filed for approval in 2014, and will determine the market structure for the next three years. Orders by the state have laid the groundwork to require some basic items in new plans including an auction to determine the utility prices.

Ohio Natural Gas Market Structure
For Columbia Gas, Dominion and Vectren, residential customers who don’t switch to a retail gas supplier are assigned to a supplier every year. The supplier provides a commodity price of gas determined through an annual auction resulting in a price changing monthly with market prices. The utility does not supply the commodity; it is supplied by a winning supplier. Customers who haven’t contracted with another supplier will see the winning auction supplier’s name on their bill. Customers may avoid a monthly variable price by enrolling with a retail gas supplier. The Public Utilities Commission of Ohio website lists supplier offers to allow for apples-to-apples comparison. Due to very few commercial customers being served by SCO suppliers in Dominion as of April 2013, customers are no longer assigned to auction suppliers, but are rotated to all suppliers if they choose not to switch.

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Posted: August 06, 2013