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Look out: Natural gas prices rising, too
Tuesday, July 01, 2008

The stratospheric rise of crude oil and gasoline prices have been in the spotlight in recent months. But consumers soon will be aware that natural gas prices also have rocketed upward as all three of Pittsburgh's natural gas utilities start charging more for the fuel beginning today.

Dominion Peoples will increase its gas cost recovery rate, the amount that it charges consumers to pass on the costs for natural gas, to $15.89 per thousand cubic feet (mcf), up from $12.44. Equitable Gas will charge $16.47 per mcf, up from $13.97, and Columbia Gas customers will see an increase to $14.12, up from $9.84.

The gas cost recovery rate is the largest portion of most consumers' monthly gas bill. For the average Dominion customer, the increase will mean a monthly bill of $159.59, up 23 percent from $129.93. The average Equitable Gas customer will now pay $174.64 a month, up 13 percent from $154.32. The average Columbia Gas customer will see an increase to $149.20, up 31 percent from $114.27.

The utilities file quarterly rate requests with the state Public Utility Commission to comply with state law requiring that they neither make nor lose money on the sale of natural gas, but pass on the cost for gas dollar for dollar.

The price for natural gas on the New York Mercantile Exchange has increased every month since December, when it traded for around $7 per million British Thermal Units. It now is at the highest levels since setting records in December 2005 in the wake of Hurricanes Katrina and Rita. Yesterday's closing price was $13.39.

"It's really come down to natural gas somewhat tracking oil," said Dominion Peoples spokesman Joseph Gregorini. "There's an anticipated and real increase in demand ... and when the demand goes up so does the price."

Columbia spokesman Matt Pitzarella noted that a late winter helped to drive demand for natural gas even higher, resulting in "five-year lows in storage for this time of year."

The quarterly changes do not apply to consumers who have long-term contracts with suppliers, nor do they immediately affect budget plan payments, which have their own schedule for adjustments.

Besides its gas cost recovery filing, Equitable Gas also filed for an increase in its distribution rate, which would produce $51.9 million that the company wants to use to update and maintain its infrastructure.

Spokesman Dave Spigelmyer said the proposed increase will be Equitable's first change in its distribution rate since 1997, during which time the company has invested more than $360 million in infrastructure.

If the PUC approves Equitable's request, the new rate will go into effect Sept. 30. Mr. Spigelmyer said customers would pay $14.50 per month more, on average.

Although consumers typically use much less gas during the summer, the combination of a late winter and an early cutoff of the Low-Income Home Energy Assistance Program may have left some users struggling to keep up with their gas bills. In such a case, the consumer should contact their utility to make arrangements.

Elwin Green can be reached at egreen@post-gazette.com or 412-263-1969.
First published on July 1, 2008 at 12:00 am
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