The Public Service Commission on October 12th ordered natural gas utilities to lower the purchased gas portion of their rates for the upcoming heating season. The lower interim rates will go into effect on November 1, 2012. Final rates will be set in early 2013.
Hope Gas customers will see their purchased gas rates decrease 12.35% from $6.25 to $5.48 per Mcf, and the Equitable Gas rate is being reduced 33.88% from $4.90 to $3.24 per Mcf.
Consumers Gas, Bluefield Gas, Blacksville Oil & Gas, Canaan Valley Gas, Lumberport-Shinnston Gas, Southern Gas, Standard Gas, A.V. Company, Tawney Gas Services and Union Oil & Gas will all be decreasing their purchased gas rates.
Mountaineer Gas will see the purchased gas portion of its rates go from $6.11 to $4.98 per Mcf, a decrease of 18.5%. Mountaineer has a base rate case pending before the Commission so the total rates have not yet been determined.
Purchased gas adjustment (PGA) proceedings provide for annual rate adjustments based on an estimate of future costs utilities will pay for gas from their suppliers for the period of November 1 through October 30 of the following year and a true-up of actual costs for the previous year. Customers’ gas rates are adjusted annually to account for differences in the cost of gas in PGA cases. The PGA accounts for approximately two thirds (2/3) of the residential gas customer’s bill.
The Commission does not regulate the supplier price which is determined by competitive markets, but does examine the gas purchasing practices of gas utilities and reviews the reasonableness of those practices. The PGA is solely a pass-through of gas costs and does not include a profit for the utility.
More information is available on the PSC website: www.psc.state.wv.us.
The following was reported on October 1st by the Bloomberg news service:
In 2011, the U.S. met 81 percent of its energy demand, the highest since 1992. The surge in hydraulic fracturing in shale formations played a major role, and has also resulted in a vast oversupply of natural gas. According to the Energy Department’s Short-Term Energy Outlook by the end of October natural gas inventories could reach a record of 3.95 trillion cubic feet.
New pipelines could boost deliveries of natural gas from the Marcellus shale deposit in the Northeast by as much as 30 percent. According to the US Department of Energy, there are approximately 1,000 Marcellus shale wells that are uncompleted due to a lack of pipeline access.
“There are new pipelines coming up and more Marcellus gas is going to flood storage going into winter,” Price Futures Group senior market analyst, Phil Flynn, said in a recent phone interview. “Unless you get a really cold winter, prices are going to be in the $2 range.”