Rising natural gas costs have prompted Puget Sound Energy to seek a rate increase averaging more than 16 percent, or $11.90 a month, for residential customers.
For most small businesses, the increase would be close to 19 percent, while large commercial users of natural gas could see their rates go up 21 percent this fall and winter.
If approved by the Washington Utilities and Transportation Commission, the increase would take effect Oct. 1.
Puget Sound Energy serves more than 105,000 businesses and households across Snohomish County.
“We aggressively manage our gas supply portfolio to protect customers as much as possible from the effects of a volatile energy market,” Darren Brady, PSE’s vice president of customer services, said in Tuesday’s announcement. “But when the cost of gas changes markedly, our rates must reflect that change.”
With the rate adjustment, the average monthly gas bill for a residential customer would top $82, up from about $70 after natural gas rates similarly increased last fall.
The last time customers paid similar rates was when natural gas prices spiked in the winter of 2000-2001, PSE noted.
Brady explained the proposed rate increase is simply passing on the increased wholesale cost of natural gas to customers. Under state law, utilities cannot make a profit on such a rate increase.
According to the Northwest Gas Association, the wholesale price for natural gas recently reached $6 per 1,000 cubic feet, compared with $4.75 at this time in 2003. PSE’s figures show the wholesale price has almost tripled since August 2002.
“It really comes down to a supply and demand issue,” Brady said.
Demand has soared because many new electricity generating plants use natural gas and many new homes are built to heat with gas.
At the same time, production of natural gas hasn’t expanded to keep up with growing worldwide demand. This summer’s record prices for crude oil also have influenced natural gas prices.
Marilyn Meehan, a spokeswoman for the Utilities and Transportation Commission, said the accelerating cost of natural gas has prompted other utilities to consider rate increases as well.
Avista Utilities, which serves Eastern Washington, is asking for a 12 percent rise in its natural gas rates, and Northwest Natural Gas plans to file for an adjustment in the coming weeks.
It may be small consolation to those who will pay higher bills, but the cost of natural gas in the Northwest usually goes up less than in other parts of the country, said Dan Kirschner, executive director of the Northwest Gas Association.
That difference isn’t as large as it used to be, thanks to major new pipelines across Canada and the United States that have tied the Northwest in with the rest of the continent’s natural gas markets.
While natural gas prices generally have been on the rise for the past couple of years, Kirschner said they are not expected to settle down in the near future.
“Industry analysts and experts are predicting the prices will stay pretty volatile for the next couple of years,” he said.
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
Let them know
The Washington Utilities and Transportation Commission is likely to act on Puget Sound Energy’s request for higher gas prices during the last week of September. The commission will accept e-mailed comments at comments@wutc.wa.gov, or written comments at WUTC, P.O. Box 47250, Olympia, WA 98504. The requested rate increase would solely cover the higher cost of natural gas.
Let them know
The Washington Utilities and Transportation Commission is likely to act on Puget Sound Energy’s purchased gas adjustment request during the last week of September. The commission will accept e-mailed comments at comments@wutc.wa.gov, or written comments at WUTC, P.O. Box 47250, Olympia, WA 98504. The requested rate increase would solely cover the higher cost of natural gas.
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