I'm pulling my hair out over a FirstEnergy Ohio natural gas audit in Youngstown. Client has been on PSO (Primary Service Option) rate for 8 years but I think they should qualify for GS (General Service) rate. The usage profile shows consistent 180-220 therms monthly for a small office building. PSO has higher customer charges but lower commodity rates, while GS is the opposite. My calculations show potential savings of $2,800 annually on GS rate but the client is nervous about switching. Anyone familiar with FirstEnergy Ohio gas tariffs?
FirstEnergy Ohio natural gas - PSO vs GS rate schedule nightmare
Jim, I'm in Cleveland and deal with FirstEnergy gas regularly. The PSO vs GS decision usually comes down to load factor and usage consistency. With 180-220 therms monthly, your client is right in that gray area where either rate could work depending on seasonal patterns. Have you run a 12-month analysis comparing both rates using actual usage data? The $2,800 savings sounds significant enough to justify the switch.
Frank, yes I did a full 12-month analysis using last year's usage data. GS rate wins in 10 out of 12 months, with PSO only being better in the two lowest usage months (July and August). The client's concern is about rate volatility - they've heard GS rates fluctuate more than PSO. Is that accurate in your experience?
Jim, rate volatility depends on the specific tariff structure but generally both PSO and GS rates track commodity costs pretty closely. The bigger issue might be contract terms - does your client have any minimum usage commitments or early termination penalties on their current PSO rate? Some utilities lock commercial customers into rate schedules for specific terms.
Hank, good point about contract terms. I need to check their service agreement for any commitments. The account has been on PSO since 2016 so any original term should be expired by now. But you're right that there might be automatic renewal clauses I need to review.
Jim, also double-check if FirstEnergy requires any infrastructure changes or meter upgrades for the rate switch. Sometimes utilities use equipment requirements as barriers to rate changes even when the customer clearly qualifies. If your 12-month analysis shows consistent savings, I'd recommend pushing forward with the rate change request.
This is interesting - we don't have FirstEnergy gas here in Indianapolis but similar issues come up with other utilities. Jim, have you considered asking FirstEnergy for a conditional rate analysis? Some utilities will run the numbers officially and provide documentation showing projected savings before you commit to the switch.
Greg, that's a great suggestion. I didn't know utilities would do conditional rate analyses. That would definitely help convince the client if FirstEnergy confirms my savings calculations. I'll contact their commercial rate department tomorrow and see if they offer that service.
Jim, one more thing to consider - does the GS rate have any demand charges or ratchets that your PSO rate doesn't? Sometimes the savings on commodity rates get wiped out by demand charges, especially if the customer has poor load factor. Your usage numbers suggest pretty steady consumption which should be good for demand charges.
Yuri, excellent point. I need to dig deeper into the demand charge structures. The GS tariff does have monthly demand charges but with the client's steady usage pattern, the demand should be relatively low and consistent. Still, that's another variable I need to model properly before making the final recommendation.
Jim, this sounds like a solid opportunity but you're right to be thorough. Gas rate switches can be more complicated than electric because of the additional variables like transportation costs, balancing charges, and seasonal adjustments. Make sure you're modeling all components, not just the base commodity and customer charges.
Update: Spoke with FirstEnergy commercial services and they do offer conditional rate analyses for qualified customers. They'll run a 12-month projection using our actual usage data and provide official documentation of projected savings. The analysis takes 2-3 weeks but it's free. This should give the client confidence to move forward if the numbers work out.
That's perfect Jim! Having FirstEnergy's official analysis will eliminate the client's concerns about your calculations. Make sure to get everything in writing including any conditions or requirements for the rate change. Looking forward to hearing how this turns out.
Great thread Jim and everyone. This demonstrates the complexity of gas rate optimization and why it's so important to do thorough analysis before recommending changes. The conditional rate analysis approach is smart - takes the guesswork out of the equation and gives clients confidence in the decision. Natural gas auditing requires just as much attention to detail as electric, sometimes more due to the transportation and balancing components.