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Village
considers helping residents buy natural gas
The Village may get into the natural gas business.
With the natural gas industry in this area deregulating, customers now
have the option of choosing from whom they receive gas. Village Council
is considering whether it wants the Village to join this game and serve
as a supplier in Yellow Springs — if voters agree.
At Council’s meeting Dec. 2, Greg Sloan, the general manager of AMPO,
Inc., a for-profit affiliate of American Municipal Power of Ohio (AMP-Ohio),
the Village’s wholesale electricity supplier, gave a presentation
on natural gas aggregation, under which a municipality would serve as
a gas supplier and negotiate prices with a gas company like Vectren on
behalf of its residents.
This approach is similar to the Village’s electric utility, which
does not produce its own power, but instead works with AMP-Ohio and other
area municipalities to purchase electricity from a number of power suppliers.
One way natural gas aggregation would differ from electricity is that
the Village would not own the gas pipelines through which natural gas
would be delivered to Yellow Springs customers. Instead, Vectren would
continue to deliver natural gas to town.
The Village, on the other hand, owns and maintains its electric lines
and a substation on Fairfield Pike.
Vectren is currently setting up its own “choice” program for
area residents. Local residents should expect to receive solicitations
from Vectren and other natural gas suppliers, Sloan said.
Customers in other Ohio communities that have become gas aggregators have
typically saved about 5 to 10 percent on the gas bills, he said.
Sloan advised the Village to consider “opt-out aggregation,”
in which all local residents would be enrolled by the Village unless they
individually choose not to be included in the program.
Under this program, the Village must first win approval from local voters
in an election. Sloan said the Village should get an issue on the May
7, 2003, ballot, because, if approved, it will take the Village 6 to 12
months to set up its aggregation system. The Village would be in a position
to negotiate natural gas prices for the fall and winter seasons next year,
Sloan said.
The deadline for getting an issue on the May 7 ballot is Feb. 20, a Greene
County Board of Elections official said after the meeting.
If the plan wins approval, AMPO would work with the Village to write an
operating plan and negotiate supply contracts, Sloan said. Vectren would
still bill Yellow Springs customers for purchasing natural gas, he said.
Governmental aggregation programs have been popular through the state,
Sloan said. During the November election, for instance, voters overwhelmingly
approved all ballot initiatives for natural gas aggregation programs,
he said.
AMPO, which works on municipal electric and natural gas aggregation programs,
is currently trying to get Ohio municipalities to form natural gas aggregate
buying groups, in which municipalities would work together to purchase
gas for their residents. By working together, the communities would “get
a favorable price” on natural gas, Sloan said.
After the meeting, Village Manager Rob Hillard said more Ohio municipalities
are buying utilities as conglomerates, which he described as one of the
Village’s strengths. “I do see that as something that can happen
with natural gas,” he said.
Last week, Council members seemed to react positively to AMPO’s proposal.
Council president Tony Arnett said that “on paper” the concept
of forming a government aggregate seems a better way to purchase natural
gas. “As a municipality, we have a better opportunity to renegotiate
prices,” he said.
Council members asked Hillard to give them a recommendation on the Village’s
options. Hillard said there seems to be “little downside” to
governmental aggregation.
On Monday, Hillard said the Village would probably not earn revenue from
purchasing natural gas, though he called it an opportunity to decrease
local residents’ gas bills and “assist in the cost of living
in Yellow Springs.”
—Robert
Mihalek
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