MOUNT VERNON — Customers of Columbia Gas of Ohio will see a little relief in their heating bill in January.
Columbia Gas has filed a required monthly report with the Public Utilities Commission of Ohio stating the price it will be paying for natural gas. The report for January shows the price of natural gas will be down by 25 cents from the price a year ago. Columbia Gas, by law, is not allowed to make a profit on the gas delivered. This decrease in cost should show up in customers’ January gas bill.
“The reason why it’s going down so much [in January] is because margin prices have fallen,” said Ken Stammen, communications spokesman for Columbia Gas of Ohio. “The price has gone down significantly and we are passing on those lower costs to our customers.”
Stammen explained there are two parts to the residential customer’s monthly gas bill. One is the gas cost recovery adjustment. This is what the company files on a monthly basis with the PUCO, and is the cost of recovering the price of the gas commodity itself. This means the customer can be charged what it costs Columbia Gas to buy the gas.
“Ohio law says we cannot make a profit on the sale of the gas commodity itself,” Stammen explained. “It’s a regulated price and basically, what we are doing is updating that price based on what’s going on in the marketplace for natural gas. When we made our filing, we set the gas recovery charge at 94 cents per 100 cubic feet. That charge in December is $1.19. For the average customer, we are projecting the average monthly bill would be $199.84. If you compare to last January, the average bill was $212.77. So people are getting about a $23 break compared to last year.”
There have been changes in how the rest of the gas bill is figured.
“We received a decision on Dec. 3 from the PUCO on an adjustment to our gas delivery charges,” Stammen said, “so that 20 percent of your bill which represents our costs for delivering the gas to our customers throughout Ohio has been raised for the first time since 1994. That took effect Dec. 3 with that [PUCO] order, so people have already been paying that new base rate.”
There has also been a change in the way the base rate will be applied in the future.
“That’s an interesting point to go into,” Stammen said. “Up until now, the delivery charge was billed the same way the gas was billed. The more you used, the more you were billed. The only difference was that there was a small fixed charge of $6.50 per month, and to this was added a charge of about 14 cents per 100 cubic feet [of gas] used. What the commission decision does, is it not only allows us to change our rates [for delivery charge] but it lets us change the structure of our rates. So now, that $6.50 charge is $12.16. That’s the flat monthly delivery charge. In exchange for that, the 14-cent delivery rate is now about 8 cents.
“So in exchange for allowing us to raise our base rate, the commission is lowering our usage-based delivery charge by almost half. And there is a two-year phase in; beginning December 2009 we will go a system where the customer will actually pay a flat-rate delivery charge of $17.81 and there would no longer be a usage-based delivery charge.”
The delivery charge accounts for about 20 percent of a customer’s bill, with 80 percent being the price of the natural gas.
“This new system will actually benefit our customers at this time of year because they will not be hit as hard by usage,” Stammen said. “In a typical January, the delivery charge will be $2.50 less than under the old system.”
Another change will be a systematic introduction of automatic meter reading systems. This will allow meter readers to make monthly readings, eliminating making estimated readings in alternate months.
“This will eventually allow the meter reader to just drive by in a truck and collect readings from the automated transmitter,” Stammen explained. “This will benefit the customer because they will be able to manage their usage better with actual readings.”
