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News Release
Natural Gas Bills to Increase Due to Higher Wholesale Prices
September 22, 2005 (2005-020)
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 – Due to higher demand and shortage of natural gas customers of Oregon’s three natural gas companies will pay more to heat their homes and operate businesses this winter.

The Commission adjusts each company’s rates once a year to reflect the actual cost of the wholesale price of natural gas. Gas companies pass through their actual cost of purchasing gas, without any mark-up, to customers and, as such make no additional profit from these rate adjustments.

Today the Oregon Public Utility Commission approved new rates to reflect soaring wholesale prices that Northwest Natural, Avista Corporation, and Cascade Natural Gas companies have to pay for natural gas. The new rates take effect October 1, 2005.
  • The monthly bill of a typical NW Natural residential customer using 59 therms per month will increase by $10.85, or 15.2%, from $71.36 to $82.21. In January, a typical residential customer's consumption of 122 therms would result in a billing increase from $141.16 to $163.58. Commercial and industrial customers will see a rate increase of from 16.6% to 18.5%. Northwest Natural serves about 517,708 customers.

  • The monthly bill of a typical Avista residential customer using 53 therms per month will increase by $13.69, or 21.9%, from $62.61 to $76.30. In January, a typical residential customer's consumption of 114 therms would result in a billing increase from $128.91 to $158.37. Rates for industrial and commercial customers will increase from 25.1% to 26.8%. Avista serves about 84,892 customers in LaGrande, Grants Pass, Medford, Klamath Falls and Roseburg.

  • The monthly bill of a typical Cascade residential customer of using 63 therms per month will increase by $8.74, or 13.5 percent, from $64.71 to $73.45. In January, a typical residential customer's consumption of 131 therms would result in a billing increase from $131.31 to $149.50. Commercial and industrial customers will see a rate increase of 15.6% to 16.5%. Cascade serves approximately 48,338 customers in Central and Northeastern Oregon.

"The same factors that kept prices high on wholesale gas markets a year ago remain today, high demand, and relatively short supply," Commission Chairman Lee Beyer said. "These increases are not related to hurricane Katrina. Fortunately, the three gas companies had purchased the majority of this winter’s gas supply well before the storm hammered the gulf coast; otherwise, gas costs would be even higher. With higher prices coming this winter, customers should look seriously at ways to reduce how much gas they use." Most of the gas flowing into Oregon homes and businesses comes from the Western United States and British Columbia.

The Commission suggests customers consider ways to use less energy this winter and check with their utility on bill payment plans to equal out their payments throughout the entire year.
The annual Purchased Gas Adjustment (PGA) passes through rate changes to customers when prices go up and when they go down. It also accounts for differences from the purchased cost of gas in the previous year with actual costs.
Wholesale prices on New York Mercantile Exchange (NYMEX) as of September 13th are 56 % higher on average than a year ago. The price of a million British thermal units of gas (MMBtu) to be delivered to the Northwest between November 2005 and March of 2006 was $12.00 on Sept. 13 compared with $7.50 in 2004.

There are some steps natural gas customers should seriously consider to reduce their energy costs during the upcoming cold months:
  • 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.

  • Clean or change the furnace filter once a month during the heating season.

  • Low-income customers of NW Natural and Avista may also qualify for bill payment assistance.

  • Bill paying assistance information is available from all gas utilities.