Natural gas bills in Western Pennsylvania set to rise

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The price of natural gas for residents in Western Pennsylvania is on its way up starting Jan. 1.

Peoples Natural Gas and Equitable Gas will each be increasing the cost of the commodity, which accounts for about half of the rate that residential customers pay. Columbia Gas plans to release its quarterly gas price adjustment this afternoon.

Residential customers in Peoples territory will see their average monthly bill rise from $75 to $81.60, reflecting a rise in the price of gas from $4.32 per thousand cubic feet to $5.11 between the two quarters.

Equitable customers' monthly bills will be around $91 starting Wednesday, up from $90 during the last quarter of 2013. Their gas cost will rise from $6.38 per mcf to $6.51 per mcf.

Utilities in Pennsylvania pass through the cost they incur to buy natural gas to the customer, without mark-up or profit. Where they make money is in the other charges included in the rate, which include the utilities' overhead expenses and distribution charges. The gas cost, embedded in the total rate, is adjusted each quarter to match up with market prices.

Peoples completed its purchase of Equitable Gas earlier this month, but the two utilities will remain on separate rate structures for the near future.

The reason Peoples' gas cost is rising more than Equitable's in the upcoming quarter is because Peoples projected that gas prices would stay lower than they have, while Equitable's projections were closer to the curve of the market.

"Part of it has just been a slight uptick in prices," said Joe Gregorini, vice president of rates and regulatory affairs at Peoples. "There's always ups and downs."

In fact, the price of gas in Peoples territory has been waffling between about $4.50 per mcf and $5.50 over the past year.

Still, Mr. Gregorini noted, natural gas rates today are half of what they were five years ago.

Anya Litvak: or 412-263-1455

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