Warm Tariff Explanation for NW Natural Customers
Posted on February 23, 2011 by Gordon Feighner
Tags, Consumers and Utility Customers
A CUB member recently called with some questions about her NW Natural bill. As usual, her questions sparked some interest among the CUB staff and we took to investigating her inquiries. The CUB member was specifically asking about two adjustments on her monthly bill - the Billing Factor and the WARM Tariff. CUB Utility Analyst Gordon Feighner researched these two fees, which impact the majority of NW Natural customers, and explains them here, in plain English.
Both of these adjustments are somewhat complicated calculations that don’t have very thorough explanations anywhere on the average customer’s bill. With these types of adjustments and all of the other taxes and fees that comprise a utility bill, it’s no wonder that most customers only look at the bottom line and the due date, and then write a check. Several weeks ago Gordon sat down with Gary Dye, NW Natural’s Field Supervisor for Gas Measurement, to get a handle on the Billing Factor. This is referred to on the bill, unsurprisingly, as “Billing Factor”. It is a number in the form of 1.XXX that is multiplied by the units of gas a customer uses each month to calculate the total therms (units) that are eligible for billing. You can find this about four or five lines down in the “Usage Summary” section of the bill. The Billing Factor consists of four sub-factors: temperature, pressure, BTU (British Thermal Unit –a measure of heat) factor, and meter multiplier. For most residential customers, the meter multiplier and temperature factors are irrelevant, as there is only one meter on a home and the majority of NW Natural’s meters auto-correct for temperature. This leaves pressure and the BTU factor to make up the bulk of the Billing Factor.
Pressure is largely a function of altitude. NW Natural has mapped out its service territory into ½ square mile “plats” and calculated the average altitude in each plat. Put simply, atmospheric pressure decreases as altitude increases. Gas becomes less dense at lower pressure, so the higher a property is, the larger the pressure factor will be to compensate for lower gas density. Barometric pressure is also considered in the pressure factor, and is based on the National Weather Service’s records at Portland International Airport. The combined pressure factor of barometric pressure and altitude is usually between 0.95 and 1.03 in NW Natural’s service territory.
The BTU factor is based on the heat content of the gas that is flowing through NW Natural’s system at a given time. Natural gas, being a natural resource, is not uniformly consistent. The composition of the mixture of gases in the system – methane, propane, butane, and ethane – can change slightly from day to day and month to month, affecting the heating value of the gas that eventually arrives at homes and businesses. The BTU factor is usually between 1.01 and 1.04 for NW Natural customers.
Taken as a whole, the Billing Factor for most customers is in the range of 2-3% each month. Extreme cases (usually in areas that are at high altitudes) may have a billing factor as large as 6-7%. For all customers, though, this adjustment is meant to improve the accuracy of gas meters by accounting for external factors.
The WARM (Weather Adjusted Rate Mechanism) tariff is the default for NW Natural’s residential customers, meaning that customers who are not interested in participating must opt out of the program. WARM provides an adjustment to bills from December 1 through May 15 to help smooth variations in bills that result from weather being colder or warmer than normal. This means that when temperatures are colder than expected, bills will be a bit lower, but when temperatures are warmer than expected, bills will be a bit higher. This adjustment is limited to $12 per month, or 25% of a customer’s monthly bill, whichever is less.
The extent to which WARM alters a bill in a given month is based on the total difference between the expected and actual temperatures in a billing cycle. This difference is measured in Heating Degree Days (HDD), which is a complicated calculation that is laid out in the official tariff notice located here.
So there you have it, an explanation of two seemingly mysterious factors that affect your monthly gas bill. CUB has supported the WARM tariff since its inception in 2003, and approved of its renewal in 2007. For customers who are not interested in participating in the program, there is a simple opt-out form available on NW Natural’s website here. (note that you have to log in to your NW Natural account to use this feature). The Billing Factor is also approved by both CUB and the Public Utility Commission, and CUB views it as a way to make billing more equitable for all customers.
If folks find themselves in Eugene on Friday, March 4, the University of Oregon’s Public Interest Environmental Law Conference will be hosting Dr Arjun Makhijani, the President of the Institute for Energy and Environmental Research, at 6:30PM in University of Oregon’s EMU Ballroom. Dr. Makhijani will be speaking on “A Carbon-Free and Nuclear-Free Electricity Sector: Need and Feasibility.”
Keep an eye out for CUB staff at the PIELC Conference this year, as Staff Attorney John Sturm and Business Director SA Anders will be in attendance.
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03/22/17 | 3 Comments | Warm Tariff Explanation for NW Natural Customers