CHEYENNE — April is a time for residents across the state to opt into the Wyoming Choice Gas program, locking in a fixed natural gas rate if they so choose — but not for Wyomingites in Cody or Cheyenne.
The Choice Gas program, created under then-Gov. Jim Geringer in 1996, allows consumers to choose a natural gas supplier from a list of nine participating companies, which often offer fixed rates under a one- to two-year contract.
The selection period for eligible residential and commercial natural gas customers began on April 6 and will end April 26, according to Laurie Farkas, Black Hills Energy senior community affairs manager.
Regardless of the supplier, Black Hills Energy is the Choice Gas program administrator, as well as the regulated natural gas utility, and provides meter maintenance, billing and emergency response services.
“During the three-week selection period, suppliers compete by offering various price options and prices for natural gas commodity to eligible customers for the upcoming Choice Gas program year,” Farkas said.
The program year will run from June 1, 2023, through May 31, 2024. Participating natural gas commodity suppliers provide individual offers to customers, either directly or through advertising, Farkas said.
Wyoming Choice Gas cities and towns include Casper, Douglas, Gillette, Lander, Laramie, Newcastle, Rawlins, Riverton, Torrington and Wheatland. A map showing all participants is available online.
The Choice Gas program is not available in Cheyenne or Cody.
Cooper Jordan, a Cheyenne resident, said in an email to the Wyoming Tribune Eagle that in early April, his father in Casper directed Jordan, a new homeowner, to lock in a fixed per-therm gas rate before the end of the month.
His dad said he had secured a rate of $0.42 per therm. Jordan noticed he had paid $0.73 per therm on his last bill. Jordan called Black Hills Energy to lock in an annual fixed rate, he said, and was told Cheyenne residents are ineligible.
“I (found) a PDF on their page mentioning eligible Wyoming Choice Gas towns. Every major and many smaller Wyoming cities are listed here, except for one: Cheyenne,” Jordan said. “The representative discloses that Cheyenne is ineligible for Choice Gas, and that as a resident, we can’t lock in rates.”
According to John Burbridge, chief counsel with the Wyoming Public Service Commission, the Choice Gas program was created under Geringer to encourage competition among natural gas suppliers and to drive down prices.
“I can’t comment as to whether that works,” Burbridge said.
The Choice Gas program was introduced through a tariff filing by KN Energy and approved by the Wyoming Public Service Commission for operation in the Torrington area in 1996, with subsequent expansion to the Casper and Gillette areas occurring a few years later, according to Farkas. During the time of the tariff filings to establish and expand the Choice Gas program, the Cheyenne and Cody areas were not included because they did not receive natural gas service from the KN Energy utility, according to Farkas.
“Although KN Energy has since changed hands to Kinder Morgan, Source Gas and then ultimately to Black Hills Energy in 2016, whose Wyoming service area includes Cheyenne and Cody, the Choice Gas Program service areas remained the same,” Farkas said.
When the merger occurred, Burbridge explained, Black Hills Energy inherited Choice Gas areas like Casper, Torrington and Laramie. BHE, he said, would have to file a separate application to “amend their tariff to include additional territories, which would include Cheyenne and other places that don’t have Choice Gas.”
Burbridge and Farkas both said BHE has looked into that process.
“At one point, they did have an application in front of (the Wyoming Public Service Commission) to do that, and they ended up withdrawing that application,” Burbridge said.
Farkas explained that Black Hills Energy did file an application to expand the Choice Gas program to include the Cheyenne and Cody areas on May 28, 2021.
“The docket experienced resistance and intervention from different parties, which led to it being dismissed by the Wyoming Public Service Commission Dec. 30, 2021, after mutual agreement from all parties involved,” she said.
The Wyoming Public Service Commission’s order addressing the dismissal of the Choice Gas program expansion docket “prevents Black Hills Energy from any further expansion filings prior to January of 2025,” she continued.
Do participants actually pay less?
Burbridge said that there are “are all kinds of reasons why people might want to be in the Choice Gas program,” but that anticipating long-term lower costs is not always one of them.
“It is similar to if you’re looking at buying stocks. They always say, ‘Past performance does not necessarily represent future success,’” he said.
On its website, the Wyoming Public Service Commission states that from 2017 to 2021, most customers who selected a non-regulated Choice Gas program supplier paid more for their natural gas commodity than they would have paid under the gas cost adjustment regulated rate option.
“There are potential risks and rewards associated with any gas pricing option a customer selects. Past performance of Choice Gas Program selections does not guarantee the performance of future selections,” the website reads.
Each Choice Gas company offers a slightly different program, although many do offer a fixed-rate contract, Burbridge said.
“If I were in a place and I wanted to go with Wyoming Community Gas, and they had a fixed rate, that fixed rate changes on a daily basis,” he explained. “It could be different for someone that signed up yesterday than it would be today. It is whatever the rate is at the time you sign up.”
The Public Service Commission regulates rates that Black Hills Wyoming Gas charges from its regulated utility, meaning that BHE is only able to recover wholesale costs.
“They pay wholesale per gas, and they are allowed to recover that. They make the return on investment on the system that delivers the gas,” he said.
Historically, Choice Gas customers pay more for their gas, he continued, because they pay the fixed rate plus added systemic costs.
“They pay the fixed rate, plus the commodity rate. The commodity rate moves around with the market on a daily basis,” Burbridge said. “It doesn’t always work out that way, if there is something weird in the market that would put the wholesale price of gas above a fixed rate someone would have locked into with Choice Gas.”
Anomalies in the weather or the market sometimes reverse the trend, he said, and the Public Service Commission recognizes that there can be times when it is advantageous to be locked into a good rate with the Choice Gas program.
“There are other reasons why people might like Choice Gas. It can give consistency in the amount they pay,” Burbridge said. “Or, like, Wyoming Community Gas advertises that they put money back into the community, and some people may like they are able to contribute to projects within their community.”
Carrie Haderlie is a freelance journalist who covers southeast Wyoming from her home near Saratoga. She has written for the Wyoming Tribune Eagle, Laramie Boomerang, Wyoming Business Report and several other publications for many years, including covering the Wyoming Legislature.
