National Fuel Gas projects 8.6 percent increase in costs

Staff report

ERIE, PA.

National Fuel Gas Distribution Corp., which has some 209,000 customers in 14 counties in northwestern Pennsylvania including Mercer and Venango, is projecting an increase in overall gas-cost expense totaling about $19.4 million or 8.6 percent beginning Aug. 1.

National Fuel has submitted a state-required purchased-gas-cost projection from Aug. 1, 2011, to July 31, 2012, to the Pennsylvania Public Utility Commission. If approved as filed, in August, the monthly bill for a typical residential customer using 95,000 cubic feet of natural gas annually would increase from $82.93 to $90.04 per month, said Nancy Taylor, senior manager of corporate communications.

National Fuel is required by law to shop for the most reasonably priced gas while still maintaining an adequate supply for customers during the most severe weather.

When market prices change, either up or down, National Fuel is required to pass those changes on to its customers.

“The primary reason for this proposed increase is that costs associated with the purchase of natural gas to be effective beginning in August 2011 are projected to be greater than those reflected in current rates,” Taylor said.

Customers are advised that this is just a forecast for prices to be experienced later this year and that it must be reviewed and approved by the PUC before becoming effective. Additionally, upon review, the forecast will be adjusted to reflect actual and more-current market prices as the year progresses. No rate change is being made at this time, she added.

For National Fuel’s Pennsylvania customers, gas-supply charges are established through annual filings such as this and can be adjusted quarterly to account for changes in the marketplace price of natural gas.

Gas-supply charges make up about 60 percent of a residential customer’s annual bill and are passed on to customers dollar for dollar without any mark-up or discount. This differs from delivery-service charges, which reflect the company’s cost of doing business and are determined by the PUC.

“Recent colder temperatures are resulting in bills that can present a hardship for some of our customers. We urge anyone who is having trouble paying his or her bill to call us at 800-365-3234. Our service representatives will work with them to set up a payment plan or refer them to the appropriate agency for assistance,” Taylor added.