Lower natural gas rates for almost 2 million Washington customers

OLYMPIA, Wash. – Almost 2 million natural gas customers in Washington can expect to see lower heating bills this winter due to a decrease in wholesale natural gas costs.

The Washington Utilities and Transportation Commission (UTC) today approved requests by the state’s four investor-owned natural gas companies to reduce rates for customers beginning Nov. 1.

Natural gas companies in Washington are required to adjust rates periodically to reflect changes in wholesale prices. More than half to about two-thirds of a customer’s monthly bill is attributable to the cost of natural gas on which the company is not allowed to earn a profit. The remaining 45 percent covers the cost of delivering the natural gas.

Puget Sound Energy’s average Western Washington residential natural gas customer using 68 therms a month will realize a drop of 7.1 percent, or $5.82, to $76.59.

Cascade Natural Gas Co.’s average residential customer will see a reduction of almost 6.5 percent. For a customer who uses 57 therms the savings will be about $4 a month.

Avista’s typical Eastern Washington residential customer using 68 therms will see a drop of 4.3 percent, or $2.58 a month, for a revised bill of $58.18.

The average residential customer of southwest Washington’s Northwest Natural Gas Co. (NWNG) using 55 therms will see a savings of about 7.7 percent, or $4.82 a month.

The rates could be subject to further revision. Commission staff will be reviewing the wholesale costs and purchasing and hedging practices of all four natural gas companies in Washington to ensure that they are appropriate in current market conditions.

The commission decision made today on Avista’s natural gas rate request is separate from the general rate case filed by the company in April. The UTC is expected to make a final decision in that proceeding next March.

The utilities distribute natural gas to customers but do not produce their own fuel. About half of Washington’s natural gas supplies come from the Canadian provinces of Alberta and British Columbia and the other half from Rocky Mountain production sites such as Wyoming.

Bellevue-based Puget Sound Energy serves more than 785,000 natural gas customers in parts of Snohomish, King, Pierce, Lewis, Thurston and Kittitas counties.

Kennewick-based Cascade Natural Gas Corp. serves about 195,000 residential and business customers in 65 communities throughout the state, including Bellingham, Bremerton, Mount Vernon, Aberdeen, Longview, Moses Lake, Kennewick, Walla Walla, Wenatchee and Yakima.

Spokane-based Avista serves more than 149,000 natural gas customers, primarily in Eastern Washington.

Headquartered in Portland, Ore., NWNG serves 70,746 residential and business customers in Clark, Skamania and Klickitat counties in Washington state.

The three-member commission is the state agency in charge of regulating the private, investor-owned electric and natural gas utilities in Washington. It is the commission’s responsibility to ensure regulated companies provide safe and reliable service to customers at reasonable rates, while allowing them the opportunity to earn a fair profit.

INGAA Statement: Interstate Pipeline System Holding Up Well After Hurricane Sandy

October 30, 2012 – In response to questions about how the interstate natural gas pipeline system is handling the Hurricane Sandy, Don Santa, president and CEO of the Interstate Natural Gas Association of America, today released the following statement:

“The interstate natural gas pipeline system continues to weather the storm well. INGAA members companies are monitoring developments and their systems actively, with a focus on potential flooding or wind damage to above-ground facilities in low-lying or particularly hard-hit areas. Any potential outages are likely to be mitigated by relatively modest seasonal natural gas demand and lower electric-generation demand due to power outages.

“Sandy has been a tragic natural disaster, and the natural gas transmission industry stands ready to serve our customers throughout this event. We are appreciative of the efforts of the pipeline crews during this event.”

New Spectra Video Highlights Domestic Abundance of Natural Gas

Here’s a recently released video by NWGA Member, Spectra Energy, putting the spotlight on our abundant supply of natural gas available right here in North America.

What do you think? Let us know in the comments below:

“What’s Up With Gas?” NWGA in the News

Last week NWGA Executive Director, Dan Kirschner, was the keynote speaker for a series of three community talks hosted by NWGA member, Intermountain Gas. Dan gave attendees some insight into the changing nature of the gas industry, the scale of the shale gas revolution and an overview of emerging markets such as natural gas for transportation.

If you like what you see let us know, Dan rarely turns down a speaking opportunity, he’s also available for children’s birthday parties (if your kids enjoy natural gas facts).

Here’s coverage of Dan’s presentation from Twin Falls, Idaho station, KMVT:

 

Customers will pay about 7.1 percent less in Intermountain Gas bills

Intermountain Gas Company customers received their sixth consecutive decrease in gas rates effective today due to a decline in the cost of gas the company buys for its customers and increased gas supply.

The decrease will come in two components: a reduction in monthly bills effective today as a result of the lower gas prices and a one-time bill credit in December.  Combined, those adjustments result in a decrease of 7.1 percent for the average customer.

The yearly Purchased Gas Cost Adjustment (PGA) projects gas prices for the next 12 months and either surcharges or credits customers the difference between the projection and the actual cost. Sometimes the PGA is adjusted more than once a year if gas prices materially change.

The variable portion of customer rates is based on the Weighted Average Cost of Gas or WACOG, which makes up about half a customer bill. With this application, the WACOG drops from 41.8 cents per therm to about 33.5 cents per therm, as low as it has been since 2002. The WACOG represents about half the total customer bill, which is now about 66.8 cents per therm during the winter months and 70.2 cents from April through November for a customer who uses natural gas for both space and water heating. For that customer, the average bill will decrease by about $1.51 per month. A customer who uses natural gas for just space heating will see a decrease of about 17 cents per month. A commercial customer will see about a $6.46 per month decrease.

In addition to the $6 million price reduction as result of lower gas prices, a one-time credit totaling $11.9 million will be included on customers’ December bill.  For residential customers who use natural gas for both space and water heating the one-time credit will be about $29.85.  Residential customers who use natural gas for space heating only will receive a credit of about $19.40.  The average December credit for commercial customers is about $129.80.

The commission said the credit will help customers during a time of year when natural gas bills are highest. “Instead of embedding the value of the credit in rates throughout the coming year, the single credit method will allow customers more immediate rate relief during a time period when natural gas usage is typically nearing its peak.”

The are several other significant factors in the overall reduction: 1) $3.7 million in benefits generated by release of some pipeline transportation capacity, 2) $4.8 million attributable to the collection of pipeline capacity costs, a true-up of expenses from the 2011 PGA and capacity release credits and 3) a $1.3 million deferred credit balance, which is the difference from the commodity costs Intermountain actually paid for natural gas and the WACOG that was included in rates.

The commission did give the company authority to surcharge customers for Lost and Unaccounted for Gas, which reduced the total credit allowed customers by $2 million.