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News Release
Commission Reduces NW Natural Rate Request
 
August 27, 2003 (2003 - 023) (UG -152)
 
Contacts:  Roy Hemmingway, Chairman, 503 378-6611; Lee Beyer, Commissioner, 503 378-6611; Bob Valdez, Public Information Officer, 503 378-8962
 
Salem, OR – The Oregon Public Utility Commission approved an immediate 1.1 percent general rate increase for customers of Northwest Natural Gas Company effective September 1, 2003.
 
The typical residential customer, using 60 therms, will see an increase of approximately $1.52 a month. Commercial customers will see an increase of approximately 2.06 percent while industrial customers on average will see a slight decrease due to a redesign in rates.
 
The PUC decision trimmed $24.2 million from the company's original request and allows an increase of $6.2 million in annual operating costs. The increase results mainly from expanding business costs including employee health benefits and several major construction projects. Rates will increase again by approximately $7.7 million when the Mist gas storage expansion and Coos Bay pipeline distribution system costs go into rate base possibly late this year or early next year. Oregon law prevents the cost of new systems from being included in rates until they are operational.
 
The Commission also reduced the company's authorized rate of return on equity to 10.20 percent from 10.25 percent.
 
The filing allows NW Natural to implement a new optional program called WARM. WARM is a mechanism that adjusts customers' bills to reflect changes in temperatures. It brings stability to NW Natural revenues, ensuring lower rates overall to customers.
 
Customer bills will also include a public purposes fee adjustment of 0.60 percent for energy conservation and efficiency.
 
The decision is the outcome of an extensive review of the company's filing by Commission staff, the Citizens Utility Board (CUB) and the Northwest Industrial Gas Users Association (NWIGU).
 
The increase covers the general operating cost of the utility. Gas prices are likely to increase again on October 1, 2003 to reflect changes in the wholesale price of natural gas. Gas commodity prices are reset once a year in the fall to reflect market changes. Increased costs or savings in wholesale gas purchases are passed directly to customers.
 
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