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News Release
Commission Urges Using Less as Natural Gas Prices Head Higher
September 28, 2004 (2004 - 026)(UG 160, UG 159, UG 158)
 
Contacts: Lee Beyer, Chairman, 503 378-6611; Ray Baum, Commissioner, 503 378-6611; John Savage, Commissioner, 503 378-6611; Bob Valdez, Public Information Officer, 503 378-8962
 
Salem, OR – Customers of Oregon’s three natural gas companies should consider ways to use less energy this winter and check with their utility on bill payment plans to spread out their payments in anticipation of higher natural gas bills this winter.
 
The warning and advice comes from the Oregon Public Utility Commission, which reviewed and today approved new rates to reflect higher prices that Northwest Natural, Avista Corporation, and Cascade Natural Gas companies have to pay for natural gas on the wholesale market. The new rates take effect October 1, 2004.
  • The monthly bill for a typical residential customer of Northwest Natural who uses 56 therms will increase by $10.40. The typical customer’s average monthly bill will go from $57.64 to $68.04, an increase of 18 percent. In January, a typical residential customer’s consumption of 135 therms would result in a billing increase from $130.49 to $155.56. Commercial and industrial customers will see a rate increase of between 20.3 to 20.6 percent. Northwest Natural serves about 517,708 customers.
  • The monthly bill for a typical residential customer of Avista who uses 55 therms will increase by $7.11. The typical customer’s average monthly bill will go from $ 57.67 to $64.78 an increase of 12.3 percent. In January a typical residential customer’s use of 114 therms would result in a billing increase from $106.22 to $128.91. Rates for industrial and commercial customers will increase from 14.8 to 15.8 percent. Avista serves about 84,892 customers in LaGrande, Grants Pass, Medford, Klamath Falls and Roseburg.
  • The monthly bill for a typical residential customer of Cascade who uses 61 therms will increase by $4.60. The typical customer’s average bill will go from $58.15 to $62.75, an increase of 7.9 percent. In January, a typical residential customer’s use of 137 therms would result in a billing increase from $126.85 to $137.19. Commercial and industrial customers will see an increase of 9.2 to 9.7 percent. Cascade serves approximately 48,338 customers in Central and Northeastern Oregon.
"Wholesale gas markets have skyrocketed compared to last year. Natural gas is seen as a clean and less expensive alternative, which has created a tight balance between demand and supply and pushed gas prices up," Commission Chairman Lee Beyer said. "Until prices come back down again there are things customers can do to lessen the impact of these price increases, especially during the upcoming winter months, when they will take a bigger bite out of household budgets."
 
Once a year the Commission adjusts each company’s rates to reflect changes in the wholesale prices of natural gas. The companies make no additional profit from these rate adjustments.
 
The Purchased Gas Adjustment (PGA) passes through rate changes to customers when prices go up and or go down. It also accounts for differences between the purchased cost of gas costs forecast in the previous year with actual costs.
 
"One of the factors behind the high prices we are seeing is the Kern River Pipeline expansion, which cleared the way for gas from the Rockies to be delivered to California," Chairman Beyer added.
 
Wholesale prices on New York Mercantile Exchange (NYMEX) are 25 percent higher than a year ago. A million (MMBtu) British thermal units of gas to be delivered to the Northwest between November and March of 2005 was priced on Sept. 24 at $5.95 compared with $4.74 in 2003.
 
Some steps natural gas customers should seriously consider to reduce their energy costs during the upcoming cold months, include:
  • Contacting your gas company to set up an equal payment plan to spread high winter bills over a 12-month period.
  • Turning your thermostat down can save up to 3% for each degree of reduction. A programmable thermostat that automatically reduces heat at night or while the house is unoccupied can lower heating bills by 5 to 10%.
  • Asking for an energy audit by the utility that provides your heating. Utilities are required to provide free energy audits. They also provide incentives such as rebates or loans available to customers.
  • Gaps, leaks and small holes in ductwork account for as much as 25 percent of home heating loss. You can get a tax credit of up to $250 for a well-designed and sealed duct system in your new home or for sealing existing ductwork. Contractors doing the work must be certified by the Oregon Department of Energy, so call 1-800-221-8035.
  • Updating low-efficiency furnaces with higher-efficiency models. All three natural gas companies offer a rebate for doing so. Customers of Northwest Natural must contact the Oregon Energy Trust at 1-866-368-7878. Premium efficiency furnaces can also qualify for a state tax credit from the Oregon Department of Energy. Check qualifying equipment at www.energy.state.or.us.
  • Fully insulating your residence generally results in up to 30% savings on a heating bill.
  • Change or clean the furnace filter once a month during the heating season if needed.
  • Low-income bill paying assistance information is available from all gas utilities.
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