Salem residents can expect break on natural gas

SALEM — Residents who remain in the city’s natural gas aggregation program can expect to save on their future gas bills, this time under a new supplier.

City council agreed Tuesday to give Mayor John Berlin authority to sign a new gas aggregation deal with Volunteer Energy Services Inc. for a 12-month period under a fixed rate estimated at $4.39 per mcf or 1,000 cubic feet, which equates to .439 per ccf or 100 cubic feet.

Participation in the program is strictly voluntary, but as Councilman Geoff Goll explained during his Utilities Committee report, with gas aggregation, the city may purchase gas at a cheaper price than individuals by entering into an agreement with a larger purchaser of gas.

The move doesn’t stop residents from shopping around on their own and opting out of the new supplier program, but the new fixed rate is expected to be almost 40 cents cheaper than the previous gas aggregation supplier’s rate of $4.77 per mcf. IGS was the former supplier with the contract ending with the October billing. Until the new program is in place, Columbia Gas will act as the supplier, with the current rate at an estimated $4.45 per mcf.

According to Paul Grodecki of American Municipal Power Inc., the public power entity which set up the city’s gas aggregation program in 2006 and sought bids for the supplier, Volunteer Energy had the better offer this time instead of IGS. During a Utilities Committee meeting prior to the council meeting, he recommended the new contract based on pricing he secured in July and said the pricing won’t change much when the program is put back in place.

Goll is the chairman of the Utilities Committee and asked what steps need taken once a decision is made. Grodecki affirmed that Columbia Gas will act as the supplier during the interim between the IGS contract expiring and the Volunteer Energy Services Inc. contract starting up. He explained the information will be sent to the Public Utilities Commission of Ohio, then letters will be sent to the eligible participants in the city apprising them of the change in supplier for the gas aggregation program and their ability to opt out if they don’t want to participate. There will be a 21-day window to opt out.

He said eligible residents can expect to receive their opt out letters sometime in November and then the program should start possibly with the January billing.

Councilwoman Cyndi Baronzzi Dickey, who also serves on the committee, asked what happens if a resident changes suppliers. Grodecki said if someone is not part of the aggregation program and has signed up with a different supplier, there may be a termination fee they’ll have to pay to that supplier, but that’s something they would need to talk to their supplier about. During the interim after IGS ends its contract and Columbia Gas provides the gas through a third-party supplier, if a resident signs up with a different supplier, their name won’t be available to Volunteer and they won’t get a letter regarding the gas aggregation opt-out option.

Councilman Brian Whitehill asked if there’s a cost associated with opting out. If a resident wants to opt out of a program with a different supplier that they chose, they’ll have to talk to that supplier themselves. As for opting out of the city’s aggregation program, there’s no cost to do that.

City Law Director Brooke Zellers said he read through the contract and didn’t find any problems with it. Since the contract isn’t costing the city of Salem anything, council was able to simply make a motion to give the mayor authority. The Utilities Committee made the recommendation to council.

The city also participates in an electric aggregation program through a different firm, but the contract for electric aggregation isn’t up until next year.

In other business, council passed a resolution approving Simmons Feed and Supply Co. for participation in the Economic Growth Initiative Incentive Program, meaning the company will receive an incentive payment from the city based on tax withholding for jobs added. Council also approved the final draft solid waste management plan of the Carroll, Columbiana and Harrison Joint Solid Waste Management District. Salem is part of the district along with all the other municipalities in the county.

The next city council meeting has been moved to 7 p.m. Nov. 8, which is a Wednesday, due to election day falling on what would have been the next meeting date.

Other upcoming meetings include Rules & Ordinances Committee at 6:30 p.m. Thursday regarding contractor registrations and Finance Committee at 6:30 p.m. Nov. 2, both in council chambers at city hall. Whitehill, who chairs finance, said he’ll announce the agenda at a later date. Dickey, who chairs Rules & Ordinances, originally announced she planned to postpone the meeting due to more information needed on the topic regarding the zoning districts near downtown. Berlin, though, requested that she still hold the meeting regarding the contractor registrations since now is the time when the registrations are being renewed and letters will be sent out soon regarding the fee.