We’ve seen consistently affordable natural gas prices for a number of years now as unprecedented growth in the production of natural gas from shale has more than doubled available North American supply.
What does this mean for ratepayers in the Pacific Northwest? Lower bills!
Over the past year, every NWGA member utility has adjusted rates downward as a reflection of continued falling prices. Whether it’s in Washington, Oregon, Idaho, or BC the average Pacific Northwest natural gas ratepayer could save hundreds of dollars a year.
Natural gas utilities use a mechanism called a Purchased Gas Adjustment (PGA) to pass the savings from lower prices on to ratepayers, here’s how the Washington Utilities & Transportation Commission defines a PGA:
A PGA is a regulatory tool used by the Utilities and Transportation Commission (UTC) to adjust the price of natural gas to reflect the changing cost of gas in the wholesale market. The single largest cost of operating a gas company is purchasing gas to sell to customers.
Companies buy gas from producers in Canada and the United States, and the price fluctuates over time. The PGA allows gas companies to periodically adjust their prices to reflect the increasing or decreasing cost of gas.
While the way natural gas rates are implemented can vary by state or province, here’s a video by FortisBC that identifies many of the key components that make up your natural gas bill: