Is it Worth it to Switch Gas Suppliers and Earn 25,000 Delta Skymiles?

My junk email account, which I use to sign up for all kinds of offers and when creating accounts, occasionally gets some interesting offers that make me want to dive straight into the details. For instance, back in March 2012, I was offered 5,000 Delta Skymiles if I switched my natural gas provider from Columbia Gas of Ohio over to Ohio Natural Gas. The email peaked my interest, but not enough to get me to do anything about it. Then in September, October, and November 2012 I received emails that the offer has been increased to 10,000 Delta Skymiles by making the switch. Still not enough to warrant my full attention. However, this week I was surprised Ohio Natural Gas had upped the ante to 25,000 Delta Skymiles if I made the switch before the end of the year, and to create a sense of urgency, the promotion was limited to the first 500 clients.

So now that Ohio Natural Gas is effectively giving me enough miles for a domestic ticket in the U.S. (never mind the whole Sky Pesos argument), they have my full attention. Where do I sign up?

As I started to dive further into the deal, I began to investigate how the rates compare with what I was already paying for our gas service to our home. So like any other inquisitive person, I created a spreadsheet to see how things compared.

Note, the above costs are only those from the supplier, in our case, Dominion East Ohio Gas, and the prices do not include additional taxes and fees from the local carrier. Now we have a baseline for comparison to the apples-to-apples charges proposed by Ohio Natural Gas.

It should also be noted that this past winter was exceptionally warm, and therefore, heating costs were low compared to chillier years.

So upon looking at the 25,000 Delta Skymiles offer, the only plan offered is a fixed rate, 12-month commitment. Personally, I have a hard time justifying a budget plan, which is meant to keep your bill constant throughout the year, because you pay a little more in the summer when you are not using as much gas, but less in the winter when your furnace is turned up high. I would much rather pay for what I use, regardless if that means my bill may be a little higher in the winter.

The Ohio Natural Gas plan offers gas at a rate of $0.699/Ccf, which is locked in throughout the year and does not fluctuate as supply costs go up or down. Comparing to the above past use numbers, our supplier never topped $0.632/Ccf. Either Ohio Natural Gas is anticipating higher gas prices this coming year, or the plan right off the start looks like it is going to cost us more in the long run (assuming future rates do not rise excessively).

Our average monthly usage over 2012 was 97 Ccf at an average cost of $0.569/Ccf. Comparing to what we would be paying with Ohio Natural Gas ($0.699/Ccf), we would on average be paying an extra $10 per month (just in supply costs).

So how does that all tie back around to the 25,000 Delta Skymiles offered through this promotion? It means we would be paying an estimated $120 for those miles from our gas supplier over a 12-month period. However, this all assumes our gas rates for the coming year remain on par with what they were for 2012. If rates go down, we would be paying more than $120 over the course of a year for the right to earn miles, and conversely if rates go up.

For comparison, purchasing 26,000 Delta Skymiles (Delta does not offer 25,000 miles, go figure) would cost you $910, so on the surface, it makes spending an extra $120 sound like a steal. In reality though, I would never pay that much money for enough miles that equates to a domestic ticket. At the most, I would pay $300 for a coach ticket in the continental U.S., which still seems like a respectable deal. My problem boils down to reasonable, low-level redemptions with Delta, which are hard to come by, and for that reason, I am not willing to spend $120 on a maybe of being able to actually use those miles in combination with what we already have banked.

So are you willing to roll the dice for the sake of collecting miles? On the surface, the promotion is eye catching, and without those that really take the time to study the numbers, they may jump all in. I, however, am more skeptical of being locked into a plan for the next year, just for the sake of earning miles.

Sometimes it is better to Save Money, than it is to Travel More!