City Saves Residents $163 On Natural Gas Bills

City Of Cincinnati Saves Residents $163 On Natural Gas Bills

The City of Cincinnati is savings residents $163 annually on their natural gas bills, just as winter approaches. Duke Energy Retail Serves (DERS) has been selected by the City to provide natural gas services to about 64,000 eligible residents, as well as small businesses as part of a utility aggregation program.

Cincinnati selected DERS as the City's new natural gas provider through an aggregation process in which the City represents all eligible individual customers as one larger buying unit to negotiate a lower price on natural gas. Energy aggregation was proposed by City Council and approved by voters in November 2011. The City awarded a similar aggregation contract to First Energy Solutions in spring of this year, saving eligible households approximately $137 on their electricity rates.

"As energy costs continue to rise for all of us, I’m pleased that the City can help put $300 back into the pockets of our residents with these two programs," said Dohoney. "Every bit helps."

DERS aggregation rates should begin to take effect in November of this year. 

Due to the fluctuation in natural gas prices, participants in the gas aggregation program may, in some months, pay more than the gas cost recovery (GCR) price charged by Duke Energy Retail Services. However, projections (based on historical pricing analyses) indicate that over a year’s time, the aggregation rate will provide the savings for participating households when compared to the current GCR price.

Next Steps

Over the next several weeks, the City will negotiate a contract with DERS.

Customers will receive a packet of information from Duke Energy Retail Services with information about the aggregation program.

The City’s program is an "opt-out" program, which means that eligible customers are notified by DERS, and must decline if they do not want to participate. If they do nothing upon notification, they will be included in the aggregate customer base, and realize the savings the City has negotiated on their behalf. Participating customers will be given the opportunity every two years at a minimum after initial service to opt-out.  If customers do choose to "opt-out," they may choose another competing supplier.

If customers have a contract with another natural gas provider, and wish to become part of the City's aggregation program, they should review the provisions of the contract to determine their options, as the terms of each contract can vary. If customers sign contracts for a provider other than DERS in the meantime, they will not be eligible for the rates the City has negotiated.

There is no cost for enrollment in the aggregation program with DERS for eligible customers.

Not every household or business in the City is eligible to participate in aggregation. Households must be current in their payments to their current gas provider, and may not be Percentage of Income Payment Plan (PIPP) customers. Generally, residential customers who are not currently under contract with another competitive supplier and small commercial customers that consume less than 500,000 cubic feet of gas per year at a single location are eligible to participate.

Aggregation Proposals

The City issued a Request for Proposals and received four responses. The chart below summarizes each proposer's original offer in terms of savings per household as compared with the standard Duke Energy Ohio GCR rate.

  Est annual spend **Savings Vs. DEO  
* Duke Energy Ohio $ 923.56    
DERS $ 760.95 $ 162.61 21.4%
INTEGRYS $ 764.52 $ 159.04 20.8%
IGS $ 778.38 $ 145.17 18.7%
Nextera $ 812.38 $ 111.18 13.7%

* Per DEO Website Avg household uses 70ccf/mo
** Annual Spend and savings inclusive of administrative costs
Costs are not weighted to winter months
Comparison uses 12 months GCR vs same period NYMEX settlements