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Natural Gas Bill Fees Rise: Hike Part of Transportation Costs; Sum Depends on Who Supplier Is

Posted on: Sunday, 19 February 2006, 12:00 CST

By Betty Lin-Fisher,Beacon Journal business writer, The Akron Beacon Journal, Ohio

Feb. 19--Two changes on your most recent natural gas bill from Dominion East Ohio should pique your interest.

The changes are actually nothing that haven't been reported in the paper, but this bill seems higher because two increases in charges kicked in this month. They are the Percentage of Income Payment Plan (PIPP) rider and the unrecovered gas costs.

Some readers may grumble about the hikes, but not want to know the nitty-gritty details. Others want all the information they can get. So here it is:

The fees that have gone up are part of those confusing transportation charges. As you may recall, transportation charges are costs that everyone pays to Dominion, regardless of whether you directly buy gas from the utility, because it still delivers the gas.

-- For customers who have had a supplier other than Dominion for less than 12 months, your transportation costs doubled from $1.59 per thousand cubic feet (mcf) to $3.18/mcf. Using Dominion's average user estimate of 17.40 mcf this month, that was an increase of $27.66 in your bill.

-- Customers who continue to buy their gas directly from Dominion and pay the Gas Cost Recovery (GCR) rate as well as customers who have bought gas from a supplier other than Dominion for more than 12 months saw an increase of only 45 cents/mcf in their transportation costs.

Let's back up a minute and look at the charges individually.

The transportation charges, which are approved by the Public Utilities Commission of Ohio, are made up of several components.

The one I've written the most about is "unrecovered gas costs." Dominion is allowed these charges to account for market volatility because it's not allowed to charge a profit on its GCR and it buys gas ahead of time. This is sometimes a charge, sometimes a credit. But after you've bought gas from a supplier other than Dominion for more than 12 months, Dominion no longer charges you for unrecovered gas costs. Unrecovered gas costs are figured into the monthly GCR for those customers, but they also pay the other portions of the transportation fees.

February through April's unrecovered gas cost went from a credit of 25 cents/mcf to a charge of 88 cents/mcf to account for the swings in prices after hurricanes Katrina and Rita. That's a swing of $1.13/mcf.

The unrecovered gas costs are set quarterly and are on a three-month lag.

The second increase in your transportation costs was to the PIPP rider, which is charged to all customers to help cover the bills of low-income customers. In November, Dominion said it had a $76 million shortfall for the PIPP program because of increased natural gas prices and more enrollees.

This month, the PIPP rider went up from 11 cents/mcf to 57 cents/mcf. Originally, Dominion asked for an increase to 84 cents/mcf, but reduced the time frame that it would collect the fees when PUCO officials expressed concern of more increases for consumers who were already paying high gas bills this winter.

If you're wondering whether you should be switching providers or going back to Dominion's GCR based on these increases, that's a decision you'll have to weigh based on the rate you've got, whether you're paying those unrecovered gas costs and whether there are any cancellation fees associated with leaving.

For instance, I'm on the WPS rate of $10.35/mcf capped rate that I locked in last August. Even with my transportation costs, I'm paying $3.05/mcf or $53.04 less than an average GCR customer this month.

But if you locked into a rate in the fall when they were $14 to $16/mcf, do the math to see whether any cancellation fees you'll have to pay will be worth your switching to another provider. Current prices are around $11/mcf for variable rates and $13/mcf to $14/mcf for long-term rates, but prices change daily.

February's GCR is $12.50/mcf and the transportation costs are $2.21/mcf for a total of $15.33/mcf with gross receipts tax included.

One last thing on transportation costs. Even though everyone pays transportation costs, they're only broken out as a separate line item for customers who have another supplier. Customers who pay the GCR will see the total rate, that $15.33/mcf rate this month.

Meter readings

This month's bill also has a change on the top. In an effort to encourage consumers to read their own meters each month to avoid estimated bills when prices are high, Dominion changed the format of its bill to show the next meter read date.

While I commend Dominion for trying to make the process more user-friendly, I think the effort fell short and is confusing.

Dominion by law is only required to actually read your meter once a year, but the company tries to read meters every other month. But it still encourages people to read their own meter monthly.

On the new bill, the prominent bold type face shows the next Dominion scheduled meter reading -- in my case that was two months away. If you look in the small print to the top right of the bill, after Dominion's phone number, it gives you the dates that you can enter your next reading to avoid an estimated bill.

That doesn't seem consumer-friendly to me.

Carrie Fanelly, director of customer service centers for Dominion, said she understands, and Dominion officials have talked about modifying the language on the bill to make it clearer.

"Unfortunately, as you can well tell, the real estate on the bill is limited," Fanelly said.

Fanelly said Dominion uses complicated formulas, including your previous usage and the weather, to estimate bills, but nothing beats an actual read either by the consumer or Dominion for accuracy.

Betty Lin-Fisher can be reached at 330-996-3724 or blinfisher@thebeaconjournal.com

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Copyright (c) 2006, The Akron Beacon Journal, Ohio

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Source: Akron Beacon Journal (Akron, Ohio)

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