Looking back on last winter, we were faced with a near panic caused by sky-high prices at the gas pump and seemingly outlandish natural gas prices. Going into this winter, energy prices appear to have moderated. However, you should still manage your winter heating costs to keep them as low as possible. There is one step that you can take right now that could take a bite out of this year’s heating expenses.


Choosing your gas supplier


In Ohio, through the natural gas choice program, consumers can comparison shop for their natural gas supplier. The Public Utilities Commission of Ohio (www.puco.ohio.gov) and the Office of the Ohio Consumers’ Counsel (www.pickocc.org) both provide instructions on choosing a natural gas supplier. If you live in another state, go to the website for the National Association of State Utility Consumer Advocates (www.nasuca.org) and click on the member directory for instructions for your state.


Calculating your savings

Calculating your projected gas cost and savings is somewhat complicated. However, both the websites mentioned above have online calculators that make the comparisons easier.

Below are the calculations for the projected gas cost for my home. My local gas company is Dominion East Ohio. For the comparison, I chose WPS Energy Services, which offers a variable rate contract with a cap through March 2007. Using my gas bill and the interactive calculator on either website I entered the following information:


  • WPS Energy variable rate of $7.96 per Mcf, from the website.
  • My annual usage of 82 Mcf per year, from my gas bill.
  • My county’s sales tax rate of 7.5 percent, from the website.


Projected Annual Natural Gas Cost


Dominion East Ohio $ 1,041.36
WPS Energy Services $ 899.50
Savings $ 141.88


Based on the calculations, if I change to WPS Energy Services, I should have a projected annual savings of 15.7 percent.


Decisions, decisions, decisions

There are several decisions that have to be made when considering a switch in natural gas suppliers:

1. Fixed versus variable rate: A fixed rate contract will guarantee the price for the length of the contract. Typically, the contract length will vary from six months to three years. The gas price in a variable rate contract will vary as conditions change. The offers I have seen adjust monthly or quarterly.

2. Choice of supplier: Make your selection from a list of suppliers that are certified by your state’s public utilities commission. Compare contract prices and conditions.

3. Contacting suppliers: Questions to consider asking a potential supplier are:

  • Are there sign-up and/or termination fees?
  • What is the rate?
  • Is the rate fixed or variable?
  • If variable, how does it change?
  • What is the length of the contract?
  • What happens when my contract expires?
  • When will the new rate start?


Signing up

You can sign up with a new supplier either online, by telephone, fax or mail. The new supplier will notify your local gas company, who will send you a confirmation of the change and the date that the switch will be made. It is important that you keep a copy of your agreement for future reference. This process may seem more complicated than it really is. Give it a try and start managing your winter heating costs today.

(Michael Shinn is a registered representative of the Financial Network Investment Corporation. Visit www.shinnfinancial.com for more information. Questions and comments may be sent to [email protected].)