Consumers' Corner

September / October 2006

In This Issue

Natural gas choice may help manage winter heating costs

With cooler weather around the corner, some consumers may be remembering the high cost of natural gas from last winter and hoping to avoid larger heating bills this heating season. One way that many consumers have to manage their bills is through choosing a natural gas supplier. Natural gas choice allows consumers to compare alternative suppliers' offers to the rate charged by the local natural gas company.

Although comparison shopping for natural gas suppliers is similar to shopping for many other items, consumers should understand their rights and know what to ask before entering into an agreement for service. Consumers need to know the rate that is offered, whether it is a fixed or variable rate, the length of the agreement, any enrollment or switching fees, if the agreement will automatically renew or if they will have to enroll again, who to contact for billing problems, when charges will be reflected on the monthly bill and if there is a fee to leave the agreement early.

For additional ways to help manage winter heating bills or more information on choosing a gas supplier, consumers should contact the Office of the Ohio Consumers’ Counsel (OCC), the residential utility consumer advocate, toll free at 1-877-PICKOCC (1-877-742-5622) to request materials on energy efficiency, budget billing or financial assistance programs. Information also may be viewed online by visiting www.pickocc.org.

return to top ^

Third decade brings utility changes, savings

As the Office of the Ohio Consumers’ Counsel (OCC) entered its third decade of service, change was a certainty across the entire utility industry as new rules and consumer protection standards were implemented, mergers and acquisitions were on the rise and the OCC continued to provide consumers with benefits and savings.

When the federal government passed the Telecommunications Act of 1996, it opened the door for cable television and local and long-distance companies to compete in each others’ markets. A year later, competitive measures were put in place that allowed consumers to choose which company would provide their natural gas. The electric utility market also put competition in place. It took three years for a restructuring law to pass but one did so in 1999 giving consumers an opportunity to “shop” for electric suppliers in 2001. As competition for energy and telecommunications services provided some benefits, the OCC still had to defend the best interests of consumers.

The OCC did just that when it brought residents several benefits, including the largest rate decrease in Ohio history. The approval of the merger between Ohio Edison and Centerior Energy gave residential customers nearly $500 million in savings. The 1997 agreement resulted in the company now known as FirstEnergy, which serves residents as Cleveland Electric Illuminating, Ohio Edison and Toledo Edison. The merger also eliminated a previously approved rate hike of $119 million and added $30 million in energy efficiency commitments.

Savings for consumers also were secured by the OCC when it worked with four large telephone companies – Alltel, GTE, Sprint and Western Reserve – to reduce rates in 1999. The reductions affected more than 1.5 million customers. Additionally, the OCC was able to negotiate an increase in the discount Lifeline subscribers receive, which helps low-income consumers stay connected to or obtain telephone service.

A major change for the OCC came when the Governing Board chose Janine Migden-Ostrander as the third Consumers’ Counsel. As the first woman to hold the title of Consumers’ Counsel, Migden-Ostrander has kept her attention focused on reducing current utility rates and preventing future increases for consumers since she began her work in April 2004. She also has diligently advocated for the establishment of energy efficiency and weatherization programs to provide savings on consumers’ bills and assist in the stabilization of prices of all utility services.

This is the fifth in a series of stories about the Office of the Ohio Consumers’ Counsel in celebration of its 30-year anniversary. Visit the OCC website at www.pickocc.org to view photos and read additional information about the agency’s history.

return to top ^

Changes for Dominion customers

Photo of Business PeopleCustomers of Dominion East Ohio soon will see a change on their natural gas bills. Starting in October, consumers will no longer see a Gas Cost Recovery rate (GCR) on their bills, but instead will see a Standard Service Offer rate.

The Standard Service Offer will be determined through an auction process. It will continue to change each month based on the market price of gas, as reflected on the New York Mercantile Exchange. Natural gas suppliers will bid to supply natural gas to Dominion for its customers who are not participating in gas choice. Other than the change from the GCR to a Standard Service Offer, consumers will see no additional changes. Consumers still will contact Dominion with meter reading or billing questions, or in the event of a natural gas leak.

This change is occurring due to a two-phase plan that Dominion filed with state regulators in 2005. Phase 1 was approved in May 2006. Dominion wanted to no longer sell natural gas to its customers, but wanted to continue delivering natural gas to homes and businesses. The natural gas would be supplied to Dominion from three or more wholesale suppliers. Throughout the approval process, the Office of the Consumers’ Counsel (OCC) advocated for modifications to the proposal to ensure benefits for consumers. The OCC continues to be involved by participating in a stakeholder group.

After the two-year pilot for this plan, Dominion may request state regulators to approve Phase 2 of its plan. If it is approved, customers who have not chosen an alternative supplier on their own will have to select one to supply their natural gas. State regulators did reserve the right to end Phase 1 at any point if they felt it was not producing the desired results for consumers.

Consumers may select a gas supplier at any point during Phase 1 or remain with Dominion. For more information on natural gas choice, consumers may contact the OCC at 1-877-PICKOCC (1-877-742-5622) or its website at www.pickocc.org.

return to top ^

OCC is in your corner

  • Based on a challenge by the Office of the Ohio
    Consumers’ Counsel (OCC), the Ohio Supreme Court
    struck down the Public Utilities Commission of Ohio’s
    (PUCO) decision that approved a rate plan for American
    Electric Power (AEP) in January 2005. The OCC
    challenged the PUCO’s failure to follow Ohio’s electric
    choice law which requires that the price of energy be set
    by a competitive market. This case is pending at the
    PUCO for revisions to the plan.

  • More than 50 organizations, including the OCC, declared
    their support for the National Action Plan for Energy
    Efficiency. The plan, released at the National Association
    of Regulatory Utility Commissioners summer conference,
    seeks to help offset the nation’s growing demand for
    energy by residential, commercial and industrial users
    through the implementation of energy efficiency
    programs. The plan was developed by a leadership
    group that included Consumers’ Counsel Janine
    Migden-Ostrander. The plan, if fully implemented,
    could help defer the need for 40 new 500-megawatt
    power plants, avoid greenhouse gas emissions
    equivalent to 35 million vehicles, lower the costs of air
    pollution controls and reduce prices for natural gas.

  • The OCC secured enhanced benefits for local telephone
    customers of Verizon in June as the company sought
    elective alternative regulation approval from the PUCO.
    As a condition of granting Verizon elective alternative
    regulation, the OCC ensured that Verizon's lifeline program complied with the PUCO's rules.

return to top ^

Lesson No. 3
Renewable energy resources – hydroelectricity

Hydroelectricity is the process of generating electricity from water currents. To use water to generate electricity, dams are built to create slow moving bodies of water. When the water is released, its force spins a generator. The generator creates electricity and sends it to power lines.

Ohio currently has 15 conventional hydroelectric plants representing 171 megawatts of electricity. In central Ohio, Columbus uses hydropower to generate electricity for its residential and commercial customers. Over 10,000 gallons of water per minute are forced through the O’Shaughnessy hydroelectric plant, fueling the turbine, which generates electricity. The water then is discharged back into the Scioto River below the dam.

In Northeast Ohio, Metro Hydroelectric in Fairlawn is working on purchasing and using the 58 foot high Gorge Park Dam on the Cuyahoga River in Cuyahoga Falls to build a new hydroelectric plant. This plant would generate electricity for around 1,200 homes.

The United States is the second largest producer of hydropower in the world, with Canada leading the way. About one-fifth of the world’s electricity is generated from hydropower. As of 2004, the United States was producing about 7 percent of its energy through hydroelectricity, representing about 10 percent of its generating capacity. Some of the more famous bodies of water that are used to produce energy through hydroelectricity include Niagara Falls, Grand Coulee in Washington and Hoover Dam in Nevada. In the late 1750s, Niagara Falls was first used to produce power with a small channel cut to run a sawmill. The first hydroelectric generation facility in the United States was built on the Fox River in Wisconsin in 1882. It produced enough electricity to light two paper mills and a house.

The main advantage of hydro systems is that there is no cost for fuel and no emissions from the production of electricity. Additionally, labor costs tend to be low since hydroelectric plants are generally heavily automated, with few personnel on site.

To learn more about hydroelectric power, contact the OCC toll free at 1-877-PICKOCC (1-877-742-5622) or visit “Smart Energy” at www.pickocc.org.

return to top ^

Federal assistance available to help rural consumers afford energy improvements

Photo of MoneyLow-income consumers in rural Ohio may be eligible for federal loans or grants to make energy efficiency repairs or upgrades to their homes. A program administered by the United States Department of Agriculture’s (USDA) Rural Development office can loan qualified residents up to $20,000 at an interest rate of just 1 percent. The payback of the loan and interest can be spread over 20 years.

The upgrades could consist of insulation; combination screen-storm windows and doors; or heating system repair or replacement. Grants, which are funds that do not have to be paid back, are available for up to $7,500 but must be used for repairs that eliminate a health or safety hazard.

The loans and grants can be used to help obtain water and sewer service as well as to repair or replace heating systems or electrical wiring. They also can be used to repair or replace a roof, structural supports, deteriorated siding and remodeling to make homes accessible and usable for persons with disabilities.

The grants and loans in this program are known as Section 504 funds and can be requested through an application and approval process that includes inspections by a USDA representative.

The USDA also announced the Home Energy Advantage in June 2006. The 18-month pilot program is designed to help more consumers qualify for loans to purchase newer, energy-efficient homes in rural areas. Energy efficient improvements, including appliances, also can be rolled into the mortgage. Home Energy Advantage increases the availability of what are known as Section 502 loans.

Income guidelines and credit requirements for the Section 502 and 504 programs vary based on location. For more information on these programs, residential consumers can visit www.rurdev.usda.gov or contact the nearest USDA office:

Findlay (419) 422-0242
Hillsboro (937) 393-1921
Marietta (740) 373-7113
Massillon (330) 830-7700

Consumers also can contact USDA’s Ohio office at (614) 255-2400.

return to top ^

Internet surfing can lead to unintended telephone charges

Consumers using the Internet should be aware that activities as innocent as downloading recipes or taking surveys could lead to unintended charges on their monthly telephone bills.

Throughout the country, consumers have noticed charges appearing on their monthly telephone bills that may be the result of Internet use. Some of the charges could stem from consumers providing telephone numbers and other information on a website. Consumers may not notice they are signing up for such services as voicemail, emergency roadside assistance or web page hosting.

However, if no disclosure is made to customers, they could be a victim of cramming, which is unlawful and occurs when a company adds a product or service to telephone bills without permission.

The Office of the Ohio Consumers’ Counsel (OCC) recommends that consumers using the Internet consider the following tips:

  • Pay attention to websites visited and read all the information associated with requests for personal information, including a telephone number. Be careful of any “too good to be true” gifts since they may require the purchase of a membership or product.

  • Review monthly telephone bills for names of companies that are not recognized. Since local telephone companies often have billing and collection agreements with other companies, charges from third parties may appear on the bill. Look for mysterious charges that may relate to an extra service or feature that was never ordered or accepted.

  • Call the local telephone company and the company providing the service with questions or to dispute a charge. Ohio’s Minimum Telephone Service Standards require contact information to be provided on bills. Consumers can reach the OCC at 1-877-PICKOCC (1-877-742-5622) to help identify charges and answer questions.

  • Some local telephone companies offer a way for customers to block third-party charges. Research by the OCC found that AT&T (formerly SBC), Cincinnati Bell and Verizon offer a way to block miscellaneous charges. While these blocks may not be 100 percent effective, they can help prevent most unauthorized charges. Consumers should be sure to find out exactly which types of charges will be blocked to ensure that the service meets their needs.

return to top ^

Q&A Preparing for winter

Q&AThere is no better time than now to start preparing your home for winter. With heating costs typically spiking this time of year, there are several no-cost and low-cost improvements to be made that may make a significant difference to winter heating bills.

Q. Where is a good place to start to improve energy efficiency?

A. When it comes to heat loss in a home, a big factor to climbing heating bills is doors and windows. A quick and easy way to make a home more efficient is to fix window drafts and door leaks with weather stripping and caulking. Consumers also may consider sealing windows with an insulation kit. Weather stripping around doors with self- adhesive foam or bronze weather stripping are effective ways to reduce heat loss. For windows, using silicone caulking to seal gaps around window molding and home siding can make them less susceptible to drafts. Insulator kits for windows can be used in addition to caulking to keep cold air outside and warm air inside.

Q. What should be done to ensure I am getting the most out of my furnace this winter?

A. Have the furnace professionally inspected to be certain it is working properly and efficiently, which will help with overall performance. Be sure to regularly check the filter. Some filters should be changed monthly or cleaned on a regular basis for a furnace to run more efficiently. A dirty filter can cause a furnace to run hotter and longer to get to the desired house temperature.

Q. Is there anything I can do with my water heater to save energy?

A. Yes. When completing a check on a water heater the first step is to look at the temperature setting on the tank. It should be set between 115 and 120 degrees Fahrenheit for most common uses. Higher temperatures cause more heat to be lost from the water tank. There are inexpensive ways to keep the heat where it is needed. An insulation blanket will maintain hot water temperatures while the addition of electric heat tape or foam rubber insulation around pipes also will reduce heat loss and lessen the chance of water freezing.

Q. What other energy efficiency tips can help with my winter heating costs?

A. Additional winterization tips can be obtained at the OCC website www.pickocc.org.

return to top ^

Information believed accurate but not guaranteed.
For information about our privacy policy and copyright, visit our Legal Disclaimer page.
The Office of the Ohio Consumers' Counsel is an equal opportunity employer and provider of services.
Office of the Ohio Consumers' Counsel - Your Residential Utility Consumer Advocate OCC Seal Home En Español Search Ask Utility Questions Action Alerts