Lock in now.

From the Department of What-Fresh-Hell-Is-This, a mailing arrived at NN.C Central yesterday.

“Natural gas prices have dropped. Lock in your rate now!” it exhorted. Inside, it encourages me to buy a…truckload? room full? bunch? of natural gas for the low low price of $1.098 per ccf. I hve no idea what a ccf is, but I assume it’s a recognized measurement of natural gas. “Interstate Gas Supply Inc. is now offering a guaranteed fixed rate of $1.098 per ccf for the commodity portion of your gas bill plus DTE/Michigan Consolidated Gas Company (MichCon) deliver charges and applicable taxes, through your December 2007 billing period,” I’m told. It goes on to say I’ll soon be paying $1.215 per ccf, and it may change based on market prices, and wouldn’t it be nice to have the peace of mind that comes with knowing I’ll be paying $1.098 through December 2007? Wouldn’t it?

Everything I know about natural gas I learned in school (it comes from the same wells as oil) and by editing business copy (utilities buy a lot of it in July, when it’s cheap, to sell in January, when it’s not). And that’s…about it. I don’t know how $1.098 stacks up, pricewise, over the long term — maybe if I wait until July, I’ll get a better offer. I don’t know what the “commodity portion” of my gas bill is, and investigation of my statements online offer no hints. What about that delivery charge? Seems like a pretty handy catch-all. How do I accept delivery of my gas? Does it arrive via pipeline? Is this like renting space in a grain elevator?

And then the terrible truth dawns: That thanks to such article-of-faith American values as “competition” and “the free market,” I will not only have to be the prime mover in selecting my household’s groceries, clothing, laundry detergent, coffee and the rest of it, I now have to keep an eye on the natural-gas market. I have to shop for heat.

And you thought choosing a long-distance service was bad.

All I can say is, if I’m going to trade commodities, I want a seat on the Chicago Mercantile Exchange, complete with a loud jacket and hand signals.

Have you done this? What’s your advice? Or, to put it P.J. O’Rourke style, “What the f**k? I mean, what the f**king f**k?”

Posted at 9:26 am in Same ol' same ol' |

16 responses to “Lock in now.”

  1. Kath said on March 10, 2006 at 9:48 am

    I haven’t seen this type of offer before. But last fall, just after media reports that gas prices were going to go up, our utility sent around letters to its customers offering to lock them in for a fixed rate for the year. Our “fixed rate offer” was just over twice what we averaged per month in the previous year. We passed. With the mild winter here in Minnesota, our January bill was only about $40 more than the previous year.

    In February, we paid $1.07 per CCF and a .12 per CCF delivery charge.

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  2. Dorothy said on March 10, 2006 at 10:38 am

    I’m positive part of the CCF stands for cubic foot. I’ll be durned if I can figure out wht the first C stands for, though.

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  3. Dorothy said on March 10, 2006 at 10:40 am

    Natural Gas Units Of Measurement

    Ccf: The most common unit of measurement applied to natural gas usage. This measurement represents a unit of volume equal to one hundred cubic feet.

    Should have done this first, I guess.

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  4. nancy said on March 10, 2006 at 10:54 am

    Yeah, but what am I paying now, and how much do I generally use in a month? My bill doesn’t help me much. And not Kath’s 12-cent-per-ccf delivery charge. If the difference between today’s rate of 1.21 and the offered rate of 1.10 is 11 cents, how will I benefit? Am i paying a delivery charge now? Again, who the hell knows?

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  5. mary said on March 10, 2006 at 2:08 pm

    I want to start using those hand signals on my job. I may print out that page and post it here.

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  6. James Moehrke said on March 10, 2006 at 2:12 pm

    This reminds of the time not long ago when those of us here in California were being deluged with offers to buy our electricty from any number of newly deregulated electric utilities. The mailers were chock-full of swell-sounding electricity rates and assurances that we’d be saving lots of money.

    How to choose a new electric company? That was way outside our comfort level. What guarantee was there that these new companies would still be around to sell us electricity? What would happen if they folded? So our household didn’t change, and lo, our electric company is still in business. All those others, they don’t advertise anymore, so who knows?

    This was during Enron’s heyday, and that worked out so well, didn’t it?

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  7. vince said on March 10, 2006 at 5:15 pm

    Frankly, it sounds like a scam.

    I’d check with your Public Utilities Commission and whatever state agency oversees investment brokers to check out the company offering this “deal.”

    Is it even really from your gas company?

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  8. nancy said on March 10, 2006 at 6:13 pm

    I dunno. They have a website. I just think the public’s learning curve is way behind them.

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  9. deb said on March 10, 2006 at 6:16 pm

    that’s what i’m wondering. they aren’t asking for your bank account numbers too, are they? ha. just kidding.

    seriously, if your gas utility is going to start throwing numbers like this in your face, they should be giving you some other, meaningful numbers to help you make sense of it all — like telling you what you’re paying now (that really should be on your bill) and defining what, precisely, the “delivery” fee is. they have no business getting people all frantic without giving them enough information to make a sound decision. i’m with vince — call your public utilities commission, plus any utilities-oversight/watchdog groups in your area. they’ll be all over it.

    and while you’re at it, alert the media.

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  10. John Good said on March 10, 2006 at 8:22 pm

    I got the same thing a week or so ago. I compared the rate to the rates on my last few Nipsco bills and saw very little difference. Not worth the gamble or effort IMHO. As much as gas has shot up in the last year, it’s hard to not beleive it will at least level off or even drop sometime.

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  11. basset said on March 10, 2006 at 10:04 pm

    I used to be a big PJ fan, going back to his days on the National Lampoon – started going off his stuff when he began repeating himself, say around the time of “Eat the Rich,” and in fact I just took my PJ collection to the used-book store last Saturday. (Ebayed all my Hunter Thompson, too – doing some serious rearranging around here.)

    That said, though, he did come up with some phrases that still stick in my memory. the “what the…” is from, if I remember correctly, a story about the Federal budget… but every time our government does something that gets Europe stirred up, I recall PJ’s classic line…

    “Who gives a s**t what the French think?”

    Meanwhile, speaking of former Lampoon writers… what ever happened to Chris Miller?

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  12. Gene said on March 11, 2006 at 12:10 am

    It’s probably legit. We used a similar deal when we lived in Ohio, locked in the price from one of several competitors while natural gas costs were low. You can save some cash by doing so. I first heard about this while working at the Beacon Journal in Akron. The consumer reporter, Betty Lin-Fisher, does several columns on this every year for NE Ohio gas customers. You might want to look up some of her old columns at Ohio.com or just email her at the Beacon.

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  13. jcburns said on March 11, 2006 at 7:53 am

    How do you pronounce those asterisks in “f**k”?

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  14. Mary said on March 11, 2006 at 3:33 pm

    I cover this stuff for a living and I can’t even figure it out.

    I was a reporter covering the early days of this; I followed the California Enron disaster as well as emerging “competitive” markets in Pennsylvania, New Jersey, Ohio and other places. My knowledge is not ground-level, but what I do recall of those markets does not make me very confident this time around.

    I’m willing to have my mind changed, though.

    The concept is that your state effectively “restructured” its energy markets, which allows alternative gas and electricity suppliers to compete with the utilities to sell the “electricity and gas commodity” to consumers.

    I live in Maryland, and they did that here too. Unfortunately, we’re now facing a 72 percent electricity rate hike because our state “restructured” its energy markets and the “transition time period” rate caps are coming off this year.

    So it’s open season, but nobody has come to fill the void. I’m hoping someone will, but I’m not terribly optimistic. A lot of companies that tried the business the first time around went out of business, leaving a lot of consumers in the lurch when prices rose after Enron imploded in 2001.

    It may be heresy for me to say this, but I’m with you. Life is complicated enough as it is. I’m not in the mood to have to hassle with ccfs and mcfs and kilowatt hours during my off time.

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  15. mary said on March 11, 2006 at 4:21 pm

    oh no. Two Marys now. I’m the one with the small m. (does small “m” hand signal.)

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  16. nancy said on March 11, 2006 at 4:26 pm

    Alternately, you could do a capital M hand signal followed by the “palms away” gesture, indicating you are “selling” the other Mary.

    We visited the Chicago Merc in my fellowship year, and I loved, loved, loved watching the trading floor. I could have stood there all day watching traders yelling and gesturing wildly in the pits. It was like a human anthill. Just the best.

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