October 3, 2008

Heat Bill Pain Eases a Bit

By Bill McCarthy

By Bill McCarthy

[email protected]

CHEYENNE - Residents will see a decrease in their heating bills for October, as well as bills that will reflect natural-gas price fluctuations in a more timely manner.

The Wyoming Public Service Commission approved Thursday a request from Cheyenne Light, Fuel and Power to reduce October residential natural-gas rates by a little more than 92 cents for each decatherm.

Cheyenne Light bills natural-gas usage in decatherms, and the amount of decatherms used is printed on customers' bills. A decatherm is a million British thermal units - a measure of heat intensity.

The rate reduction begins today, but no one knows what the rate will be for November. That's because the PSC also approved a request from Cheyenne Light to adjust its rates monthly rather than quarterly. That means Cheyenne Light will be back before the commission around the end of October to adjust the rate for next month.

Chris Kilpatrick, director of rate-electric regulation for Cheyenne Light's parent company, Black Hills Corporation, told the commission that the monthly adjustments should show customers that "gas pricing does reflect market flux."

Brian Iverson, vice president of electric regulation for Black Hills, added that customers should see smaller rises in their bills, as well as decreases, with monthly adjustments rather than a steeper increase at once in the quarterly adjustments.

Amy Zamora, an analyst with the Wyoming Office of Consumer Advocate, said her office did not object to the change to monthly rate adjustments.

Cheyenne Light does not make money on natural-gas costs; those are passed to the consumer at the same price the company pays for gas.

PSC Chairwoman Cindy Lewis and Commissioner Mary Byrnes expressed concern that customers would not be adequately informed of rapid changes.

"We can have them published in short order," Iverson said. There will be about a 30-day notice, since bills are for the previous month.

Along with information on bills and in a newsletter, the company plans to use advertising to keep customers aware of rate changes.

"We plan to be very proactive," added Mark Stege, Cheyenne Light vice president of operations.

State and utility administrators have warned of dramatic price increases this winter because of the volatility of the natural-gas market.

Rob Morris, Cheyenne Light supervisor of energy services, said current projections put the natural-gas winter cost increase at about 25 to 30 percent higher than last year.

But he warns the market is volatile and unpredictable.

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