New contract shows savings of 29 percent vs. Standard Choice Offer
Tuesday, the City of Bellefontaine, along with 10 other communities in West Central Ohio entered into a new, two-year aggregation agreement for the supply of natural gas.
Bellefontaine, along with other members of the aggregation group, were previously contracted with Volunteer Energy as the natural gas supplier through April of 2023.
However, those contracts were voided when Volunteer Energy filed for bankruptcy earlier this year. Since that time, residents who were enrolled in the aggregation program were rolled back to the “Standard Choice Offer” (SCO) through CenterPoint Energy.
The SCO is a variable rate and is currently at $1.06 per CCF. Due to numerous circumstances around the globe, the SCO has gone up nearly 77 percent since March.
With rapidly increasing prices, it was imperative for the city to work with Affordable Gas and Electric (AGE), who represents the communities in the aggregation program, to procure a fixed rate price for natural gas for residents prior to the heating season.
Natural gas prices are fluctuating on a daily basis due the high volatility in the market.
AGE has been monitoring the markets since the original aggregation contracts were voided.
Late last week, AGE notified us last week that they had identified a dip in the energy market, and felt the time was right to seek bids for the supply of natural gas.
“We are pleased to inform our residents that just this morning, the City of Bellefontaine along with our other 10 partner communities signed agreements to lock in a fixed rate of $0.756 per CCF for 24 months beginning in October of 2022,” Mayor Ben Stahler said Tuesday.
“This is a significant savings of nearly 29 percent versus the current SCO. AGE believes that this is the ‘low spot’ for natural gas prices this season, and prices will likely continue to increase as we approach the winter months.”
The term of 24 months is long enough to see significant cost savings, but short enough that to renegotiate a new contract should there be a drop in prices in the
future, Stahler noted.
The signing of contracts with Constellation NewEnergy Tuesday is the first step in ensuring residents of Bellefontaine continue to have access to affordable natural gas as rates climb.
In the coming days and weeks, the city, in partnership with AGE will be releasing additional information on how residents can ensure that they will be enrolled into the new natural gas aggregation program when it becomes available.
“Aggregation continues to be a smart choice for our residents,” the mayor said.
“During the last natural gas aggregate contract residents in the aggregate collectively saved $125,000.
“Currently, residents enrolled in the electric aggregate program are enjoying a rate of $0.0499 per kWh, which is less than 50 percent of the current SCO through AES. This rate is locked in through December of 2024.”