Natural gas rates going up, down, nowhere

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Pittsburgh's three natural gas utilities are adjusting their rates today, but only customers of Peoples Natural Gas will see a rate decrease.

The largest local utility, Peoples is reducing its gas cost recovery rate to $5.09 per thousand cubic feet (mcf) from $5.86 per mcf. That includes a commodity charge of $5.31, a delivery charge (called "capacity charge") of 46 cents, and a gas cost adjustment credit of 68 cents per mcf.

Equitable Gas customers will continue to pay $7.93 per mcf, as they did last quarter. That includes two items that show up on a customer's bill -- a commodity charge of $7.21 per mcf and a gas cost adjustment charge of 72 cents per mcf. Within the commodity charge is a charge of $5.46 for the gas itself; the remaining $1.75 is for delivery costs.

Columbia increased its rate. Unlike the other two utilities, Columbia bills customers in units of 100 cubic feet, or ccf. Its new residential customer rate of 57 cents per ccf is the equivalent of $5.70 per mcf, up from $5.34. A breakdown of the rate was not available at press time.

Wholesale natural gas prices have edged upward in the past three months. At the end of March, the contract for soonest delivery of the commodity closed at slightly less than $4 per million British Thermal Units (mmBTUs); Wednesday, it closed at $4.605.

Supplies are ample, helping to keep prices in check. According to the Energy Information Administration's most recent report, the United States has more than 2.6 trillion cubic feet of natural gas in storage, more than 13 percent higher than the five-year average of 2.3 trillion cubic feet.

The gas companies adjust their rates every three months to comply with state law that forbids them from either making or losing money on the sale of natural gas. For each company, its "gas cost recovery" rate includes a charge for the gas itself, plus a charge for delivery and a "gas cost adjustment" that corrects previous over- or undercharges.

Budget customers, whose monthly payments are determined by spreading out estimated charges over a one-year period, are not subject to the quarterly resets. Instead, rate changes come into play as their budget payments are recalculated, which each of the utilities does at different intervals.

The quarterly reset also does not apply to nonutility gas suppliers such as Dominion Energy Solutions and Direct Energy, which are not governed by the public utility code.

Those companies make contracts with consumers to provide gas at a fixed rate for a fixed period, typically a year or more. Customers with contracts that expire during the next few months will receive offers to renew at rates that may be lower than what they are paying now, or they can call before their contracts renew to see if they can negotiate a lower rate.

The state Office of Consumer Advocate publishes a guide to nonutility gas suppliers, available on its Web site at www.oca.state.pa.us/Industry/Natural_Gas/gascomp/GasShoppingGuide.pdf. The monthly guide lists the suppliers that serve customers of each utility, and how much they currently charge new customers for gas.


Elwin Green: 412-263-1969.


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