Dan Heyman of the West Virginia Public News Service wrote the article below, as published on July 13, 2012:
Gas Utilities Seek Hikes Despite Dropping Nat Gas Prices
CHARLESTON, W. Va. – Despite record low prices for natural gas, West Virginia utilities are asking the state’s Public Service Commission (PSC) to confirm sharp rate hikes. Mountaineer and Dominion Hope both want the PSC to rule in their favor on rate requests based on higher natural gas costs.
Clarksburg resident Steve Perdue pays Hope about $75 a month. He says the hike seems ‘weird’ when, all around him, he can see the Marcellus boom that has driven natural gas prices to a near-record low. “It’s overwhelmed the area, there’s so much gas that they’re getting. We just can’t see why they would be getting rate increases when the price of their basic raw material has gone way down.”
According to West Virginia Affiliated Construction Trades (ACT), Dominion Hope is asking the PSC to confirm a 30 percent increase in the part of the bill that goes to pay for the gas. The company says overall, bills would only go up by 17 percent, and that the rate increase is part of a standard annual procedure for utilities to recover money for legitimate, regulated costs.
However, says Perdue, a lot people can’t afford the increase. “Times are pretty tough, especially for our seniors. We’ve got a lot of people laid off. People on fixed income and your just average working person. It’s tough on a family.”
According to Dominion Hope, the company does not make any money from recapturing the cost of buying natural gas. But critics say that’s not true for Hope’s sister company. Hope used a financial hedging program to set the price it paid for gas. Through the complex financial deals, another branch of the Dominion conglomerate could have made as much as $20 million off of Hope’s purchases.
To Perdue, that doesn’t sound right. “They’re in a no-lose situation, collecting all the way around. One of their diversified companies might lose money, and they’ll ask for money to recoup that loss. But on the other end, they’re making the money.”
ACT and AARP are among the groups opposing some of the rate hikes.
Click here to view this story on the Public News Service RSS site and access an audio version of this and other stories.