Increased Natural Gas Supplies, Lower Demand Could Mean Lower Winter Bills for Dominion East Ohio Customers

October 30, 2008

CLEVELAND, Ohio – Increased natural gas production and lower demand have combined to drive natural gas prices lower for the upcoming winter heating season. Dominion East Ohio’s Standard Service Offer (SSO) rate for November will be $8.799 per thousand cubic feet (mcf), which is more than $1 less than the prior monthly rate. Dominion East Ohio sales customers could see their natural gas bills decline by nearly 5 percent from last winter, company officials report, based on projected gas prices, a return to normal weather conditions and the effect of new rates, which the Public Utilities Commission of Ohio recently approved.

"Current natural gas market conditions are generating some good news for customers in the midst of these difficult times," notes Bruce C. Klink, Dominion East Ohio president. "Even with new base rates in place, our sales customers could still see a $50 reduction in their natural gas bills over the entire winter, compared with last year, assuming temperatures are in their normal range and gas prices remain at levels currently reflected on the natural gas futures market."

Klink cautions, though, that many factors, especially weather, could change market conditions rapidly. "Remember, hurricane season, which can affect Gulf of Mexico natural gas production, is still not over," he says. "Also, keep in mind that sustained colder-than-normal temperatures in November and December could lead to higher prices in January, February and March."

Current market conditions played a key role in determining Dominion East Ohio’s Standard Service Offer (SSO) filing of $8.799 per mcf, effective November 13, made today with the Public Utilities Commission of Ohio. This new SSO is 10 percent less than October’s rate of $9.802 and is only 1 percent higher than the November 2007 SSO of $8.709 per mcf.

The Standard Service Offer, which accounts for a majority of a customer's bill, represents costs associated with securing natural gas supplies for customers who purchase gas from Dominion East Ohio. Under state law, Dominion East Ohio cannot earn a profit on the SSO. Whether natural gas prices rise or fall, the company passes along those costs directly to customers.

The SSO varies each month, based on the New York Mercantile Exchange (NYMEX) month-end settlement price ($6.469 per mcf) plus a Retail Price Adjustment of $2.33 per mcf. The Public Utilities Commission of Ohio (PUCO) approved that $2.33/mcf adjustment, which resulted from a July 22, 2008, auction Dominion East Ohio conducted with Commission supervision.

Klink explains that several factors have combined to lower market prices for natural gas, including:

  • Moderate summer weather meant that residential customers used less power for air conditioning than usual, reducing demand for natural gas-fired electrical generation.
  • Current economic conditions have reduced industrial natural gas demand, contributing to lower market prices.
  • The federal Energy Information Administration (EIA) reports that annual national natural gas production has increased, despite temporarily losing one-third of Gulf of Mexico production to Hurricanes Ike and Gus.
  • Natural gas storage levels remain higher than the five-year average nationwide, according to the EIA. This means that Dominion East Ohio will have plenty of natural gas on hand to meet customers’ winter heating needs.

The SSO applies to the nearly 400,000 of Dominion East Ohio’s 1.2 million customers, who still buy gas from the company. Gas costs for the more than 800,000 customers, who buy natural gas from other suppliers under Energy Choice or governmental aggregation programs, will continue to be governed by terms of their supplier agreements.

Klink advised customers to consider their options under Energy Choice. Dominion East Ohio has launched a new Web site to help customers make the best choices in purchasing natural gas. The interactive site, which serves as a one-stop shop for gas choice information, can be accessed online at

Dominion East Ohio worked with the PUCO, the Office of the Ohio Consumers’ Counsel (OCC), natural gas suppliers and community organizations, to launch the Web site. Dominion East Ohio’s Energy Choice Web site offers tools, such as links to the PUCO’s "Apples To Apples" comparison chart ( or 1-800-299-7271) or the OCC’s "Comparing Your Energy Choices" chart ( or 1-877-742-5622).

Dominion urges customers to practice conservation to help reduce their winter heating costs. For low-cost and no-cost conservation tips, check the Energy Conservation Home section of "These conservation techniques can help our customers get the most from their natural gas dollars this winter," Klink says. "Over the past 30 years, conservation-savvy Dominion East Ohio customers have reduced annual average residential consumption from 140 mcf to less than 100 mcf today."

Dominion is one of the nation's largest producers of energy, with a portfolio of approximately 27,000 megawatts of generation. Dominion serves retail energy customers in 12 states. For more information about Dominion, visit the company's Web site at


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Neil Durbin, (216) 736-6239 or toll-free in Ohio, 1-800-556-4400

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