Deregulated market offers options for customers to choose natural gas supplier | Local News

“Understand what you’re shopping for. Read the fine print. Understand the (financial) impact shopping will have,” said Nils Hagen-Frederiksen, spokesperson for the state Public Utility Commission.

When looking at your natural gas utility bill, there are two sets of rates that affect the monthly cost: supply and distribution. The distribution rate is usually steady and can’t be switched, but the supply side can fluctuate depending on the time of year and the demand for natural gas.

That happened in October, when the supply charge for Columbia Gas more than doubled from .32613 per therm to .74566, and utility companies in eastern Pennsylvania had even higher rate hikes. That rate will remain the same over the last quarter of this year and will be adjusted again in January, but it may not fall as fast as the supply rate offered from dozens of companies that consumers can choose.

Hagen-Frederiksen pointed people to www.pagasswitch.com, that offers information and rate comparisons for customers. There are numerous options from more than 60 companies that offer a variety of terms at different costs with variable or fixed rates at different contract lengths.

“You’re not switching your utility or bill. You’re switching the entity that is giving you natural gas you use,” Hagen-Frederiksen said. “Those are competitive prices. But read the fine print, understand the terms, read your bill and check historical figures.”

On each utility bill, there is a “price to compare” number showing consumers what they’re paying for supply costs. Since utility companies update that number quarterly and “layer” the purchasing over several months, the spikes and dips aren’t quite as pronounced as what suppliers may offer for variable rates.

“The wholesale market can be volatile, and has been since the war in Ukraine, inflation and the colder months coming,” said Terry Fitzpatrick, president of the Energy Association of Pennsylvania that represents utility companies.

He said utility companies typically get better prices over the long-term with their purchasing process, but acknowledged there can be deals out there for savvy consumers. Fitzpatrick, who previously served as a PUC commissioner, said if people decide to sign a contract with a supplier, they should pay attention to details in the contract and know when the term is coming to an end. Otherwise, they could be automatically be renewed at a monthly variable rate if the consumer doesn’t make a new selection at the end of the contract.

“Be diligent if you’re doing it. Don’t be on autopilot,” Fitzpatrick said. “Do you want to be actively involved comparing prices and making sure that when your contract ends you’re making the best choice for you?”

Shopping for energy is nothing new in Pennsylvania ever since deregulation occurred a quarter-century ago. Customers could begin shopping for electricity rates from suppliers in late 1996, and the natural gas supply market opened up three years later. But with higher prices now, it’s becoming more appealing to consumers.

One of those suppliers, York-based Shipley Energy, said they’ve seen an uptick in new customers since October when higher rates went into effect at many utilities across Pennsylvania. It’s current fixed rate at .689 per therm is lower than Columbia’s price, but it comes with a 12-month contract, meaning it eventually could be higher than the utility’s rate if that drops over the next year.

Laura Greenholt, vice president of marketing for Shipley, noted that their lower rate will save consumers money during the coldest months of the year from December through March when people are using the most natural gas.

“We’re in a much better supply situation here that helps the prices come down,” Greenholt said. “It’s a pretty low effort from doing your homework. There’s the PUC shopping website, which has a lot of supplier information and they can compare options.”

Customers who sign up won’t notice any changes except for the name of the “supply” company on their bill, which still comes from the utility company. The signup process is easy and can be done online or over the phone, provided the customer has his or her account information. Some suppliers even offer perks, she said, including Shipley’s rewards program that offers 3% back on purchases.

“It’s pretty seamless. They don’t need to swap out any equipment,” Greenholt said. “They just need to go online and sign up … and provide their account number.”

When someone’s contract with a supplier ends, they can shop around again or they’ll automatically be enrolled in the supplier’s variable rate going month-to-month. Another option is to notify your utility company that you intend to return to their rate, which is purchased on the wholesale market and can be competitive over time.

“If you choose the default (price from the utility) they effectively shop on your behalf,” Hagen-Frederiksen said.

Hagen-Frederiksen likened the deregulated market to buying Pepsi or Coca-Cola in a grocery store. Some customers may buy one brand on each visit regardless of the price while others decide to buy whichever is the cheaper option on that particular date.

“Most people don’t think about that. … Much like electricity, consumers aren’t compelled to shop (for natural gas),” he said. “If you wish to shop, it’s a personal decision.”