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Gas Producer Pitches Tax Credit for Consumers

Posted on: Thursday, 20 October 2005, 00:00 CDT

By Mike Dennison, The Montana Standard, Butte

Oct. 19--BOZEMAN -- Natural gas marketer Ron Perry of Cut Bank has a solution for rising home-heating costs in Montana this winter: Pay a portion of state production taxes back to consumers.

Perry, president of Commercial Energy of Montana, proposed Tuesday that the state cap oil-and-gas severance tax revenues at their 2005 level and use any excess to give consumers a credit on high natural gas bills.

"I think everybody wins," he said in an interview at Gov. Brian Schweitzer's energy summit in Bozeman. "The only ones who lose are state and county (treasuries). We're not in this to raise revenue. We're in this to make something happen." State oil-and-gas tax revenue is about $100 million for the 2005 fiscal year and should double in the next 12 months, primarily because of increased gas prices, he predicted.

The Legislature could cap the revenue at a certain amount and designate any excess as a rebate for natural gas consumers both residential and business.

For example, if the excess was $70 million, consumers could get a rebate of about $2 per dekatherm of consumption. The average household consumes 10 to 15 dekatherms per month during the winter, and sometimes higher.

The rebate could mean huge savings for institutional consumers as well, such as schools, hospitals and the university system, Perry said.

He said the state and county governments would get no less revenue than they received in the past year, and gas producers would pay the same amount of taxes regardless Montana consumers use about 35 million dekatherms of natural gas a year, he said.

Perry's company owns natural gas production and also markets natural gas to business customers in Montana and California. His Montana customers include hospitals and colleges.

The credit would be a welcome relief for consumers, who will raise record-high natural gas prices this winter, he said.

NorthWestern Energy customers are paying about $9 per dekatherm for natural gas, which is up from about $6 per dekatherm earlier this year. Perry said current prices in Montana are hovering near $12 per dekatherm, and may go up a bit more by December and January.

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Copyright (c) 2005, The Montana Standard, Butte

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Source: The Montana Standard

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