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Natural gas bills to drop this fall

Puget Sound Energy plans to cut rates by 13 percent in October.

By Eric Fetters, Herald Writer

The cost of staying warm should go down this fall for natural gas customers of Puget Sound Energy.

The Bellevue-based utility said it intends to reduce its natural gas rate by 13 percent as of Oct. 1. That would reduce the typical household's natural gas bill by about $11.27 monthly, according to PSE.

That would bring the average bill down to $82.12 each month.

The proposed rate cut, filed Thursday with the Washington Utilities and Transportation Commission, is subject to that agency's approval.

"We're pleased to be able to request this rate relief for our customers, especially as the winter heating season approaches," Stephen Reynolds, PSE's chairman and chief executive officer, said in a written statement. "Hopefully current gas market conditions will continue into the latter part of 2008 and we will be able to continue to pass along the savings next year."

Marilyn Meehan, spokeswoman for the utilities commission, said a hearing to consider the rate cut is set for Sept. 26 in Olympia. It's expected commissioners will approve it.

The proposed rate cut comes in response to the lower wholesale prices PSE has paid in recent months to acquire natural gas supplies.

Because state-regulated utilities cannot profit on wholesale purchases, the utility filed for a purchased gas adjustment to pass along to customers the reduced price of gas-supply costs.

The last rate reduction for PSE customers was in 2002. Since then, wholesale natural gas prices moved steadily upward until this year.

PSE raised rates last October by more than $7 a month, or 9 percent. That followed a 13 percent rise in autumn of 2005, when rates spiked in the wake of Hurricanes Katrina and Rita.

Additionally, PSE won regulators' permission in January year to enact a general rate increase of about $3 a month. Unlike the annual purchased gas adjustments, general rate increases are permanent.

Dan Kirschner, executive director of the Northwest Gas Association, said milder weather and relatively stable demand for natural gas have helped to moderate prices somewhat since 2005.

PSE also filed a separate request Thursday with state regulators to reduce the monthly charge PSE natural gas and electric customers pay into a fund for helping low-income households cover their utility bills. The fee averages about 31 cents for the average residential natural gas customer. PSE is proposing to lower the monthly charge by 3 cents for natural gas customers.

Reducing the fee isn't intended to reduce how much assistance money is generated, said PSE spokeswoman Dorothy Bracken. Instead, the fee doesn't need to be as high because of the increasing number of customers paying it, she explained.

"We continue to add to our customer base. That's why we suggested it be reduced," she said.