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NW Natural Files for Gas Rate Hike; Utility Asks for Nearly 10 Percent Increase to Cover Wholesale Costs

Posted on: Tuesday, 30 August 2005, 18:00 CDT

NW Natural's Clark County residential customers can expect their bills to rise an average 9.8 percent on Oct. 1, following the utility's filing Monday of a rate hike request to cover the increased cost of buying wholesale natural gas supplies.

The average customer's natural gas bill would grow by $7.49 to a monthly fee of $83.96, according to the request submitted to the Washington Utility and Transportation Commission.

The increase is virtually assured of being approved by regulators because the agency historically has agreed to increase rates for "pass through" costs. This proposal falls into that category because the additional money covers the utility's wholesale costs and not a profit.

Utility spokesman Steven Sechrist said NW Natural didn't plan to file any requests this year for a general rate hike.

Commercial customers will see rate increases of between 9.8 percent and 11.4 percent, depending on usage. The industrial rate adjustment would be between 10.4 percent and 15 percent, depending on usage.

The utility has nearly 60,000 Washington customers, the bulk of whom live in Clark County, with the estimated remaining 1,500 in Skamania and Klickitat counties.

Residential customers have watched their bills rise upward of 40 percent since 2000, according to data from the utility. The average customer uses 66.2 therms a month. The residential per-therm rate five years ago was 81.9 cents for the first 40 therms and 95.8 cents for all additional therms.

Currently, the utility charges residential customers $1.08 for all therms. The new rate would be $1.19 for all therms used.

"Natural gas prices continued to rise this year because of the tight demand-supply balance in the U.S.," said Randy Friedman, gas supply director for NW Natural, based in Portland. "Also, the record- setting prices for oil we've been experiencing have continued to put upward pressure on all energy prices."

Two weeks ago, the utility filed a request with Oregon regulators for a 13 percent residential rate increase.

Friedman said that other factors impacting wholesale natural gas supplies include increased demand due to a stronger economy, more use of natural gas to fuel electric generation and an especially active hurricane season this summer in the Gulf of Mexico, where large supplies of oil and gas are produced.

Meanwhile, he said, domestic gas production has remained largely unchanged.

NW Natural Gas Co. president and chief executive officer Mark Dodson said the company is offering a variety of programs to help customers. Programs include low-income energy assistance, equal bill payments throughout the year, energy efficiency information and cost- free gas equipment checkups.

The three-member Washington commission will hold a public meeting and vote on the rate increase at 9:30 a.m. Sept. 28 at the commission's Olympia office at 1300 South Evergreen Park Drive, Southwest.

Public comments are also welcome by e-mail, at comments@wutc.wa.gov or at WUTC, Post Office Box 47250, Olympia, 98504.

Update

Previously: NW Natural said it expected to file a rate increase request with state regulators in August. The filing seeks to increase rates for the utility's nearly 60,000 customers in Washington, mostly Clark County, beginning in October.

What's new: The utility fulfilled that promise Monday, asking the Washington Utilities and Transportation Commission for a 9.8 percent increase in residential natural gas prices.

What's next: The commission will hold a public meeting and rule on the request Sept. 28.

Source: Columbian

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