HB 102 Natural Gas Market In Ohio
By Rep. Kristina Roegner (R-Hudson)

There has been some discussion recently regarding a bill I introduced, House Bill 102 (HB 102), which addresses Ohio’s natural gas markets. As a strong proponent of the free market, I believe that competition is beneficial for consumers. Generally when suppliers compete, prices come down and quality improves. Subsidies, in any form, hinder true competition. HB 102 simply says if the Public Utilities Commission of Ohio (PUCO) finds that there are subsidies in the natural gas market, then these subsidies will be charged to the supplier, who benefit from the subsidy. Any subsidies recovered would be returned dollar for dollar to the consumers. The goal of HB 102 is to ensure that the playing field is fair by eliminating subsidies in the natural gas market, and at the end of the day we, the consumers, will benefit.

Gas bills in Ohio are basically divided into two parts. The first part is intended to pay for the “distribution” of the gas to your home. This part is unaffected by HB 102. The second part is intended to pay for the actual “natural gas”, which you consume. For the cost of the natural gas, most everyone has a choice. You can either:

A. Shop: Shop on the open market for your gas (respond to solicitation letters, make an apples to apples comparison on the PUCO website etc..), selecting the offer which best meets your needs

B. Standard Choice Offer (SCO): Do nothing and default back to the public utility. The utility gathers customers into tranches and goes to auction.

-So far, so good… The issue arises in areas around customer acquisition, customer sign up, etc. - Take for example, a customer welcome letter , required by the State of Ohio, which informs that customer of their choice; either Shop or SCO. In the case of option A (Shop), the cost of that letter is built into the price of the gas and paid for by ONLY those consumers who selected option A. However, the same welcome letter in option B ( SCO) is paid for by the ratepayers of the public utility and that charge is passed on to ALL consumers (those who selected option B and A). The effect of this is that the SCO market is being subsidized by those who actively shop for their natural gas, creating an unfair and inequitable situation. This is only one example of the many subsidies in the SCO.

If this is not corrected, eventually those who shop on the open market will become discouraged that they are subsidizing those who do not, and Ohio will move further away from the competitive marketplace. Moving away from the competitive market would hurt all of us as consumers.

I view HB 102 as merely a bridge to ensure that as Ohio moves towards a competitive market place for our natural gas that the playing field is fair so competition can occur without subsidies and we, the consumers, will benefit. As we move forward, I welcome the input of all Ohioans on this important issue.

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