Good And Bad News for Natural Gas Customers
Posted on October 29, 2015 by Bob Jenks
Tags, Energy
There is good news coming this winter for Oregon households with natural gas heat. It will cost less to heat your home this winter. The PUC recently approved rate reductions for the three major natural gas utilities that serve Oregon. For residential customers, rates will be lower beginning in October:
Northwest Natural 11% reduction
Avista Utilities 12.6% reduction
Cascade Natural Gas 6.6% reduction
The cause of this reduction is a basic case of supply and demand. Natural gas suppliers keep a fair amount of the gas needed for winter usage in storage, like the underground storage NW Natural has at Mist in NW Oregon. Around the country last winter was warmer than normal. This meant that households used less gas. At the end of last winter, there was still a lot of natural gas in storage. As a result, there was less demand for gas in the spring, summer, and fall as utilities across the country did not need to fill their winter storage supplies. Reduced demand pushes prices down. So gas this year is cheaper than it was last winter.
This rate change is associated with the gas that the utilities buy to provide to customers. The costs of their distribution pipelines, customer service programs, and management are recovered separately through general rate cases.
Now for the bad news: two of Oregon’s gas utilities are trying to raise customer rates through general rate cases. Cascade has a case before the PUC that would raise residential rates by 3.5%, while Avista has a case that would raise residential rates 8.9%.
The Avista case is quite troubling because at the same time Avista is raising rates significantly for residential customers, it is proposing to cut those rates by 7% for its large industrial customers. CUB believes this is unfair and is challenging this allocation of costs. Some of Avista’s costs relate to increased load growth on their system. But that load growth is coming from industrial loads, not residential loads. Other costs involve replacing pipe that serves all classes of customers. And, in the case of many of the investments, Avista cannot even identify which customers are served by the investment.
In arguing against this unfair allocation of costs, CUB pointed out that the PUC used to have a policy that, if a rate case had costs going up, all customer classes would see some increase in their rates. We are asking the Commission to reestablish that policy by requiring Avista’s rate increase to be spread fairly across all customer classes.
More information coming as this case is resolved, so stay tuned!
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05/02/17 | 0 Comments | Good And Bad News for Natural Gas Customers