• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Heating Bills May Cool Off: Exclusive: Utility Sees Rates Falling Because of Lower Market Prices

Posted on: Monday, 23 January 2006, 12:00 CST

By Elizabeth Souder, The Dallas Morning News

Jan. 23--Atmos Energy says relief is on the way.

The North Texas natural gas retailer expects gas rates to drop significantly in February thanks to lower market prices.

That's good news for customers reeling from December bills, which arrived in many mailboxes last week. Still, final February bills will depend on the weather.

Bills rose in December for two reasons: Natural gas rates were higher than the year before, and the cold snap prompted people to use more gas.

"It's all attributable to those first 10 days in December," said Atmos spokesman Rand LaVonn.

Early December days were colder than usual, though the warm spell later in the month meant temperatures on average were a bit higher than normal.

Last month the average North Texas household used 8.3 thousand cubic feet of gas, up from 7.3 mcf a year ago. On a cold day, a heater must work harder, and use more energy, to heat a house. So a household that doesn't change the thermostat uses more gas during a cold month than a warm month.

Also last month, Atmos charged $13.02 per thousand cubic feet of gas, up from $8.66 the year before. That means the average bill for fuel alone shot to $108 from $63 the year before, not including service charges and taxes.

The company charges the wholesale price of natural gas, and only profits on service fees.

The jump in December bills, which followed a mild November when people used less gas, caused customers to feel frustrated.

Tell Us

Were you surprised at the figure on your last energy bill? Comment | View Results

"We have experienced a large volume of calls from people who are concerned about their bills and wondering if their meters need to be checked," Mr. LaVonn said. "In 99 percent of all those we check, the meters are accurate."

One factor that could impact the accuracy of a bill is Atmos' policy of estimating usage when the company can't read a meter.

Atmos' policy is to physically read each meter at least once every three months, if not more often. The Texas Railroad Commission allows natural gas companies to wait six months between readings.

If a customer uses, for example, more gas than Atmos estimates, Atmos will charge the customer for the extra gas on the next bill, at the new rate. If the rate goes down, the customer gets an advantage. If the rate goes up, the customer loses money.

On the other hand, if Atmos owes a customer money for over-estimating usage, the customer is repaid at new rates, which could be higher or lower than the rates the customer paid for the extra charges.

To avoid that risk, customers can read their own meters and call Atmos with the numbers.

Mr. LaVonn said the company aims to read every meter every month, but if a meter is behind a fence or near a dog, the company must contact the customer and arrange for a reading.

In January, Atmos' rates dropped to $12.60 per mcf from December's $13.02. Atmos anticipates another significant drop in February.

This week, Atmos is finalizing February rates, taking into account the wholesale cost of the gas in storage, the cost of gas Atmos has reserved under contract, and the cost of buying gas on the open market.

Around the 25th of each month, Atmos calculates the rates for the next month and gives the number to the Railroad Commission.

Natural gas futures prices have been drifting lower this month after closing at a fresh all-time high of $15.38 in mid-December.

On Friday, natural gas futures closed at $9.28 per million British thermal units, up 4.1 percent.

Email esouder@dallasnews.com

-----

Copyright (c) 2006, The Dallas Morning News

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.

NYSE:ATO, NASDAQ-NMS:MOSY,

Source: The Dallas Morning News

More News in this Category