Ohio Energy Suppliers
After deregulation of the Ohio energy market took effect on January 1, 2001, consumers in the state were able to compare electricity and natural gas prices. They could now select a different company for their energy services. Since then, almost 4.8 million Ohio electricity customers have switched to an alternate electricity provider.
In the first few years of deregulation, price differences between utilities and retail energy providers (REP) were small. Except for the urban parts of the state there were only a few energy suppliers, which customers could switch to. Today, there are hundreds of retail energy suppliers available, depending on where you live in the state.
While during the first few years, not many customers decided to switch to other energy suppliers, an average of 59% of Ohio customers had switched electric suppliers at least once by 2014. Most Ohio energy consumers can now choose from a variety of different offers like fixed and variable-rate plans.
Energy Price Fluctuation
Energy supply rates for electricity and natural gas in Ohio fluctuate over the years but also throughout the course of a year.
According to the Energy Information Administration (EIA), Ohio’s average residential electricity rates slightly went up from 11.83 cents per kilowatt-hour (kWh) in January of 2018 to 11.98 cents per kilowatt-hour in January of 2019. This represents a 1.3% increase for this 12-month period.
Across all sectors however, Ohio electricity prices dropped about 1.2% between January 2018 and January 2019, from 9.80 cents per kWh to 9.68 cents per kWh respectively. During the same time, U.S. average retail electric prices went up 1.8% (from 12.25 cents/kWh to 12.47 cents/kWh). In average, electricity prices across the U.S. were over 8.4% higher in August 2018 (13.28 cents/kWh) compared to January 2018.
While natural gas rates fluctuate significantly throughout the year, gas prices also went up by 14.4% during the same 12-month period. The Ohio natural gas price for residential consumers fluctuated from $6.45 per thousand cubic feet (MCF) in January 2018 to $7.38 MCF in January 2019. This change reflects an increase from $0.65 to $0.74 per therm or 14.4%.
Natural gas prices fluctuate throughout the year and retail prices are significantly higher during the summer months. In the above period, average Ohio gas prices reached a high of $2.78 per therm in August 2018, which is over 331% higher than the cheapest rates in January of the same year.
Benefits of Fixed Energy Rates
With the fluctuation of energy supply prices on the wholesale market, the price per kilowatt-hour of electricity or per therm of natural gas can change when you’re on a variable-rate plan. By switching to a fixed rate plan you have the benefit of consistent and reliable electric and natural gas rates that don’t change for the duration of your contract.
If you switch to a fixed rate plan, any changes in wholesale energy prices won’t affect your individual energy rates. A fixed electric or natural gas plan makes it easier to budget and it can save you money when energy prices increase.
By Public Utilities Commission of Ohio (PUCO) regulation, retail energy providers cannot add or pass-through any unforeseen charges to customers on fixed-rate energy plans.
Organization of Ohio's Energy Market
Electricity service in Ohio is generally split up geographically into those areas serviced by utilities and those serviced by the rural electric cooperatives (RECs). There are 25 RECs serving more than 380,000 rural residents and businesses in 77 counties across the state. They are not governed by PUCO. RECs are member owned not-for-profit utilities providing service to their members only.
Electric and natural gas choice is limited to Ohio residents living in areas serviced by the incumbent utilities overseen by PUCO. The utilities are also providing Standard Offer Services (SOS) to customers who have not (yet) switched to a retail energy supplier.
Utility Companies In Ohio
The original utilities or electric distribution companies (EDCs) in Ohio are now owned by four national energy companies: American Electric Power (AEP) Ohio, Dayton Power & Light (DP&L), Duke Energy Ohio, and FirstEnergy Companies (Ohio Edison, The Illuminating Company and Toledo Edison). Residents in their respective territories can choose a retail electricity provider for their electricity supply.
AEP Ohio is the largest utility company in Ohio with nearly 1.5 million customers in 61 counties. The company operates as Columbus Southern Power and Ohio Power and is a subsidiary of Gahanna, Ohio based American Electric Power. The Dayton Power & Light Company is headquartered in Dayton, Ohio and owned by the AES Corporation.
The company has over 520,000 customers in 24 counties throughout the Miami Valley. Duke Energy Ohio is part of Duke Energy and serves about 850,000 customers in Ohio and a small portion of Kentucky. Ohio Edison, Toledo Edison and Cleveland, Ohio based The Illuminating Company are owned by FirstEnergy Corp. headquartered in Akron, Ohio. The Ohio subsidiaries serve over 1 million, 300,000 and 700,000 customers respectively.
Natural gas supply in Ohio is provided by four main utilities, Columbia Gas of Ohio, Dominion Energy Ohio, Duke Energy Ohio and Vectren Energy Delivery of Ohio.
Headquartered in Columbus Ohio, Columbia Gas of Ohio is the largest provider of natural gas service in the state with over 1.4 million customers across the state. Dominion Ohio is a subsidiary of Richmond, Virginia based Dominion Energy, serving nearly 7.5 million utility and retail energy customers in eight states. Vectren is a subsidiary of Houston, Texas based CenterPoint Energy; the company provides gas services in about 20% of the Ohio state territory.
Certified Retail Energy Suppliers in Ohio
Customers in Ohio can also purchase their power from one of the certified retail electric suppliers (CRES) registered by PUCO. According to PUCO, there are currently 1,148 certified competitive retail electric providers that consumers can switch to. These retail electricity suppliers include the original utility companies, marketers, brokers or aggregators, and generating companies, which supply electric generation service directly to retail customers. Marketers are businesses selling electricity or gas services to residents or businesses whereas brokers or aggregators contract with retail energy providers on behalf of groups of buyers, which make use of economy of scale.
In Ohio, there are currently 779 certified competitive retail natural gas supplier, which residents and businesses can choose from, depending on the area they live in. Most of the competitive retail suppliers are brokers and aggregators, which act as middlemen between the retail energy provider and ultimate customers in Ohio.