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Gas Rate Increase Takes Effect

Posted on: Friday, 7 October 2005, 15:00 CDT

By Jeff Sturgeon, The Roanoke Times, Va.

Oct. 7--A spike in natural gas rates is in effect in the Roanoke Valley and nearby communities.

A typical homeowner who paid $154 in January for 150 therms of gas would owe $230 for the same amount of gas this month. A therm is a measurement of the heat content of natural gas and equals about 100 cubic feet.

This winter could be the "worst ever" for the price of natural gas, warned a press release from the State Corporation Commission on Monday.

The spike was forecast last month, when Roanoke Gas predicted steep increases in the price it would likely pay for gas in bulk this fall and winter. The gas company can pass those costs directly to customers, both residential and commercial, as long as it lets state officials know first.

Roanoke Gas, a unit of RGC Resources, received clearance Oct. 1 for just such an increase, said Ken Schrad, spokesman for the SCC.

On a yearly basis, a typical residential customer could pay up to $1,600 to heat a home, compared with between $900 to $1,000 previously, John Williamson, president of Roanoke Gas, said last month.

When bulk natural gas prices come down, so must bills, and the SCC is charged with enforcing that mandate, Schrad said.

According to the SCC, "the cost of gas currently makes up approximately 80 percent of a typical customer's total bill. The remainder of the bill represents the regulated cost of delivering the natural gas to the customer's home or business." That's known as the base rate.

On Wednesday, Roanoke Gas received SCC permission to raise its base rate 2.2 percent on an interim basis pending a full review. If it can't justify that increase at a March hearing, it would have to pay customers back. This increase, estimated to add about $1.80 to a monthly residential bill, is much smaller than the increase looming due directly to higher natural gas costs.

In a customer notice on its Web site, the gas company says customers may want to continue spreading the cost of their gas year-round.

"Manage your natural gas costs more effectively by enrolling in our Budget Billing Program," the notice says. "This is an equal payment plan based on the annual consumption of the previous budget year (July-June). You have the assurance of knowing what your monthly bill is by spreading the annual cost of your natural gas utilities into equal payments."

Schrad said the gas company has the right to terminate service over unpaid bills. Customers should receive 10 days' notice, he said. The commission asks gas companies to voluntarily not terminate anyone's service if the temperature is forecast to be at or below freezing. As best as Schrad can recall, gas companies have complied, he said.

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To see more of The Roanoke Times, or to subscribe to the newspaper, go to http://www.roanoke.com.

Copyright (c) 2005, The Roanoke Times, Va.

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

RGCO,

Source: The Roanoke Times

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