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Dominion Increases Its Natural Gas Rates: N.E. Ohio Customers to Pay More in May

Posted on: Tuesday, 25 April 2006, 09:01 CDT

By Jim Mackinnon, The Akron Beacon Journal, Ohio

Apr. 25--Increasing crude oil and gasoline prices have helped pull up natural gas as well.

As a result, Northeast Ohio residents will be paying more for Dominion East Ohio natural gas in May under a new rate plan filed Monday with state regulators.

Dominion's new price for customers who have not chosen another supplier will be $10.934 per thousand cubic feet, a 13 percent increase from the previous cost of $9.716 for April. The new May gas cost recovery (GCR) is 14 percent more than what Dominion charged in May 2005. The rate changes monthly.

Dominion estimates that the higher May gas cost will push the average residential bill to $79.04 next month, or $10.57 more than in May 2005. The average April residential cost was $118, and March was $217.

About 42 percent of Dominion's 1.2 million Northeast Ohio customers pay the monthly GCR cost, with the remaining customers contracting with a different supplier.

The rise in crude oil prices is a major factor in the increase in natural gas, said Jeff Murphy, director of pricing and regulatory affairs at Dominion.

The two energy sources do not rise and fall in perfect tandem, but they are linked, he said.

For one, companies that have the ability to switch from burning high-priced oil to lower-priced natural gas can make gas more costly by the increased demand, he said.

In addition, natural gas storage inventory adjustments have also helped push prices up, Murphy said. While natural gas storage is now in surplus, actions taken to adjust the inventory have increased the fuel's price, he said.

The energy markets remain jittery about the upcoming expected heavy hurricane season and its potential effect on natural gas sites in the Gulf of Mexico, Murphy said.

By law, Dominion cannot make a profit on the gas cost recovery charge. It simply passes along price changes to its customers. Dominion and other gas utilities make their profit by how much gas they transport and distribute to customers, not on the fuel itself.

To check natural gas rates offered by other companies, go to the Public Utilities Commission of Ohio Web site, www.puco.ohio.gov, or to the Ohio Consumers' Counsel site, www.pickocc.org.

Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@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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