Meadville Tribune

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January 3, 2013

National Fuel projects 9.2 percent rise in natural gas costs

ERIE — Residential customers of National Fuel Gas may be paying more than 9 percent more for natural gas later this year.

National Fuel Gas Distribution Corp. has projected a 9.2 percent increase in the typical residential monthly bill as part of its state-required annual purchased gas cost projection. The annual projection, submitted to the Pennsylvania Public Utility Commission, is forecasting a $16.7 million increase for natural gas purchases to be made from Aug. 1, 2013, through July 31, 2014.

If approved as filed, in August 2013, the monthly bill for a typical residential customer using 90,000 cubic feet of natural gas annually would increase $7.02 a month from $76.61 to $83.63, an increase of 9.2 percent.

However, the filing is just a prediction on future prices and no gas supply cost change is being made at this time, according to National Fuel.

The forecast is for prices to be experienced next winter (2013-14) and the forecast must be thoroughly reviewed and approved by the PUC before it becomes effective, according to National Fuel.

Also, the forecast will be adjusted to reflect actual and more current market prices as the year progresses, said Sandra James, National Fuel spokeswoman.

“When market prices change, either up or down, we are required to pass those changes on to our customers,” said James. “The primary reason for this proposed increase in gas supply charges is that costs associated with the purchase and transmission of natural gas to be effective beginning in August 2013 are projected to be greater than those reflected in current rates.”

For National Fuel’s Pennsylvania customers, gas supply charges are established through the annual filings and are adjusted quarterly — each Feb. 1, May 1, Aug. 1 and Nov. 1 — to account for changes in the marketplace price of natural gas.

Gas supply charges make up approximately 53 percent of a residential customer’s annual bill and are passed on to customers dollar for dollar, without any mark-up or discount, James said. It differs from delivery service charges, which reflect the company’s other costs of doing business including costs associated with installing and maintaining the local pipeline delivery system, and are determined by the PUC.

National Fuel serves approximately 209,000 customers in 14 counties in northwestern Pennsylvania, including Crawford County.

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