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Natural Gas Rates Jump 40 Percent

Posted on: Tuesday, 2 August 2005, 00:00 CDT

Jul. 30--Okaloosa Gas District customers are facing what likely is the largest increase in natural gas costs in the company's history, a 40 percent jump.

The district announced Friday that the rate from August through January will be 93.78 cents per therm, a standard heating unit. Over the past six months, the district's 35,000 customers paid 65.35 cents a therm.

An average customer would pay $9.95 more.

"As far as I can tell, that's the largest increase we've ever had," said Gary Long, vice president of marketing.

The rate is adjusted every six months and reflects the actual cost of natural gas to the district.

The district includes most of Okaloosa County, northern Escambia County, some of Navarre and other parts of Santa Rosa County, and South Walton County.

Several factors affected the current rate, at least one keeping the rate lower than otherwise might be expected.

"We undercharged customers the last six months," Long said. "It's complicated, but we buy gas at different rates during that six months and we expected the price to be low. The price changes all along, and it wasn't as low as we predicted. So we undercharged customers about 8 cents. We added that to the charge.

"Also, our pipeline supplier overcharged us 2 cents, so we take that off and it's back down to 6 cents. We add that to the new wellhead price to reach our current figure."

Gas bills also include a steady delivery charge of 43.61 cents per therm, which pays for operation and maintenance of the pipeline system, and a customer charge of $10, which covers the cost of reading the meter and office expenses.

Long said it is possible that the rate could change in the customer's favor within the six-month period.

"I don't want to get people's hopes up," he said. "But we're not sure where the price of gas is going to go. If we are paying less for it in the next couple of months, we'll lower the price immediately, not wait for February."

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Source: Northwest Florida Daily News

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