“We are confident the new rate will save program participants money,” said Adam Sackenheim, Fairfield’s assistant city manager.
Credit: Gillian Hart
Credit: Gillian Hart
“Our rate is fixed; the Duke Energy rate is pretty variable.”
The new 12-month aggregation contract begins with the October meter reading and is again with AEP Energy, as negotiated and recommended by consultant Energy Alliances.
The new rate customers will pay for natural gas is $0.6499 cents per ccf, compared to the current rate of $0.5894 per ccf.
Duke’s rate is variable but the estimated rate at the beginning of the heating season is about “70 cents, if not a little bit higher,’’ said Rich Surace, Energy Alliances’ chief operating officer.
Eligible residential and business customers will get letters explaining the program with instructions on opting out beginning this week. The deadline to opt out is Sept. 19.
Those who don’t opt out will automatically be enrolled at the new rates, Sackenheim said. Residents can opt out at any time at no cost.
This is the second natural gas aggregation contract since voters approved both natural gas and electric programs at the polls two years ago. The first natural gas contract ends with the September meter reading.
Those residential customers who participated in that contract, on average, saved about $25 or five percent over the first eight months, Surace said. Overall, $100,519 was saved on the city’s 4,507 natural gas aggregation accounts when compared to Duke’s rate during the same period.
Credit: Rich Surace
Credit: Rich Surace
Most of the increase can be attributed to the gas supply charge, Sackenheim said. About half of the total natural gas bill is the gas supply charge, the other half is the delivery charge.
“The energy market is very volatile now,’’ Sackenheim said. “That’s why we went with a short-term, 12-month contract. Our objective was rate stability.”
Fairfield is one of 32 communities Energy Alliance negotiated the same rate for, Surace said.
The increase comes after a new electricity aggregation contract began in June with Dynegy that increased rates from 6.19 cents per kilowatt of electricity to 9.39 cents per kilowatt of electricity.
The savings from the electricity contract over the Duke rate is more significant because “everybody in the city has electric,’’ Sackenheim said. “Fewer homes use natural gas so the cumulative savings are less.”
On average, residents saved $214 over a 14-month period over Duke’s electric rate under the first contract. The overall savings on the 10,929 Fairfield accounts over that period, was $2.342 million, or a 17.5 percent savings.
Credit: USER
Credit: USER
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