Natural gas bills to rise

By Stephanie Waite , Times Business Editor

SPECIAL REPORT

Customers of two natural gas companies will be digging deeper into their pockets to pay their bills this winter - up to $20 more a month.

Dominion Peoples and Columbia Gas both announced Friday that because of anticipated increases in natural gas prices this winter, customers will get higher bills in October.

The companies said they would file a gas cost recovery request with the Pennsylvania Public Utility Commission. When natural gas prices go up, companies may pass on that increase to their customers.

Dominion Peoples customers should expect an 18 percent average increase in their total monthly bills during the upcoming heating season, as compared with the last heating season, said William McKeown, director of rates.

Under Dominion Peoples' new filing, the GCR, which represents two-thirds of a customer's bill, will increase from $5.16 to $6.20 per thousand cubic feet.

The average residential customer using 111,000 cubic feet per year would see an increase of about $13 a month, as compared with a year ago.

Columbia Gas projects an increase of about 28 percent, or $20 a month for its average residential customer. Cost per thousand cubic feet will be $6.93.

The difference between Columbia's increase and Dominion Peoples' increase stems from the way the companies estimate their natural gas costs, Columbia spokesman Rob Boulware said. Columbia's number crunchers are estimating a greater increase than Dominion Peoples' are.

In addition, Columbia has in the past underestimated the natural gas increase and has to make up for the shortfall.

If the estimate indeed proves to be too high, PUC rules call for the company to refund the extra money to consumers with 18 percent interest, Boulware said.

Columbia Gas customers' bills are probably about the same as Dominion's when other costs such as delivery and monthly fees are factored in, he said.

The companies do not profit on the gas costs and are required to purchase the cheapest gas available. Actual bills vary depending on weather, home energy efficiency, the number of natural gas appliances and household usage patterns.

Officials attributed the increase to sharply rising prices for natural gas on the national market. Prices have doubled since the beginning of the year.

As Dominion Peoples explained it, warmer-than-normal weather the past two winters depressed market prices, prompting many producers to drill fewer new wells.

Less exploration and drilling activity eventually reduced the supply of natural gas on the market, while demand remained high, thanks to a strong economy. This supply-demand imbalance resulted in rising prices, which companies are passing along to consumers.

Both companies said there is no danger of a natural gas shortage.

http://www.timesonline.com/news/news/4308610.htm

-- Martin Thompson (mthom1927@aol.com), October 01, 2000

Answers

How many "Gas Bills To Rise" stories have we read, just this past week alone? Seems endless. Omious? You bet--and for a lot of things over and above utility rates.

-- JackW (jpayne@webtv.net), October 01, 2000.

I can't understand why the American Gas Association keeps saying, ho hum, lots of gas available.

The inventory, usage, and N.Y. Mercantile Exchange price do not bear this out. I suppose they are merely trying to avoid a panic.

-- Billiver (billiver@aol.com), October 01, 2000.