Market changes shelve Oak Harbor natural gas aggregation

Aug 4, 2021 | Around Ottawa County, Featured | 0 comments

Oak Harbor Village Council has shelved its gas aggregation program, which originally had been estimated to grant residents a substantial savings on monthly utility bills.

The measure was scrapped due to significant changes in the natural gas industry, said village officials

“A deal doesn’t make sense right now, but we are going to continue to monitor our options so we can save community members money when it does make sense,” said Oak Harbor Mayor Quinton Babcock. “Our residents put their faith in us, and we want them to get solid savings.”

The purpose of establishing a natural gas aggregation program was to allow the Village to bargain as a unit to achieve a “bulk discount,” and subsequently better fuel pricing for all Oak Harbor residents.

As a single customer, residents typically do not possess bargaining power with natural gas supply companies and are not able to achieve a significant savings. In November, Oak Harbor residents voted to approve a measure that authorized the Village to contract natural gas on their behalf, but the Village Council has now elected to postpone entering a contract due to lackluster options in a changing market.

Earlier this year, Columbia Gas Transmission, which manages the long-range transport of natural gas, was permitted by the Federal Energy Regulatory Commission to implement an additional fee to customers. This has had a significant effect on the natural gas marketplace and prevented bargaining units from achieving as great of savings as they had historically. According to Babcock, when the Village first researched the program, it expected customers to see significant savings as group buyers versus individual buyers. The current reduced savings do not justify making the choice for residents.

“We wanted to take this opportunity to update the residents,” said Council Member Barry Hall. “This is a disappointment, but Council is always looking for ways to better serve its residents.”

The Oak Harbor natural gas aggregation program would have allowed residents the freedom to opt out at any time, making the program a win-win for everyone. The program, if implemented in the future, would not require residents to deal with a new company. While switching to a gas supplier negotiated by the Village, residents would still use Columbia Gas’ infrastructure. Billing, service, and meter reading would all operate through Columbia Gas, and the only noticeable difference for the resident would include a one-line change on monthly utility bills, noting the gas supplier and lower price.

“We knew the numbers could change. Fortunately, there were no downsides to voting in the program,” said Mayor Babcock. “Sometimes, the best thing you can do when making a deal is walk away from the table for a bit.”

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December 2023

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