Councilman worried Choice Gas program in jeopardy

McCOOK, Neb. -- Black Hills Energy is looking to ditch the Choice Gas Program which requires residents to research and select a natural gas supplier annually, at least according to one City Council member.

"There is one concern before the Nebraska Public Service Commission. Black Hills has requested to do a study of the choice program, they would like to do away with it. And of course ACE is opposed to that," said McCook City Councilman Gene Weedin during last week's meeting. Weedin represents the city as a board member on the Public Alliance for Community Energy, commonly known as ACE, Board of Directors.

Black Hills Energy acquired Source Gas earlier this year and quickly committed to continuing and evaluating the Choice Gas Program for a period of three years. According to Weedin, Black Hills Energy has since requested the Nebraska Public Service Commission approve a Cost of Service Agreement which they say cannot co-exist with the Choice Gas Program.

ACE has asked the Public Service Commission to dismiss the application because it is modeled with no mathematical way to predict an outcome, according to a report Weedin provided to City Council.

"Because it may harm Choice Gas in the western part of Nebraska and because it is so similar to a case where the commission recently granted rate payer relief from a high cost gas field that failed to deliver market price gas over the long run," stated the report.

Public Service Commissioner Gerald Vap of McCook confirmed this morning Black Hills Energy applied for a cost of service agreement and a hearing was conducted on the matter last month. Vap said the commission is expected to announce its decision next week and more details should be available at that time.

The Choice Gas Program has been in place for 19 years in Nebraska. In 2016, 55 percent of customers did not choose a gas program supplier and were rolled over to their current supplier, according to Weedin's report.

The ACE program is popular among city leaders because of its profit sharing format. In March the City of McCook received a check for $10,879 from the program. The funds stem from revenue above operational costs that are returned to ACE's 72 member communities, McCook included.

The ACE program increased its customer base from 2015 to 2016, statewide and locally. The program increased by 1.3 percent statewide and 2.1 percent in McCook.

Overall, Constellation was the most selected program during the 2016 Choice Gas Program and was selected by 38 percent of participants. Source Gas ranked second with 24 percent; ACE ranked third with 20 percent; Vista ranked fourth with 14 percent; Wood River was selected by 4 percent of participants; and Continuum ranked last with 1 percent, according to the report.

66 percent of participants preferred a fixed rate and 23 percent selected a Weathershield option. 6 percent chose Market Rate and 5 percent selected a Fixed & Market PPC option.

The vast majority, 63 percent, preferred a 1-year selection with 36 percent preferring the 2-year option.