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Commission Approves New Natural Gas Rates, Stresses Ways For Consumers To Reduce Their Bills
September 28, 2000 (2000-047)
Contacts: Ron Eachus, Chairman, 503 378-6611; Roger Hamilton, Commissioner, 503 378-6611; Joan H. Smith, Commissioner, 503 378-6611; Bob Valdez, Public Information Officer, 503 378-8962
Salem, OR - As expected, the Oregon Public Utility Commission today approved requests from Oregon's three natural gas distribution companies for increased rates to reflect wholesale costs which have more than doubled in the past year. The companies are Northwest Natural, Cascade Natural Gas and Avista.
Residential customers of Northwest Natural will see their rates rise by 21 percent. The monthly bill of a typical customer using 62.2 therms will increase by $9.05. Rates for commercial customers will go up 24 percent and for industrial customers by 31 percent. The overall increase is 21.6 percent. Northwest Natural serves an estimated 470,000 customers in Western Oregon.
Residential customers of Avista, which serves portions of Southern and Eastern Oregon, will also increase by 21 percent. The monthly bill of a typical customer using 61 therms will go up $7.35. Rates for commercial customer will go up by 23 percent, and for industrial customers 25 percent. The overall increase is 18.96 percent. Avista has roughly 77,000 customers.
Residential customers of Cascade Natural Gas will see rates go up by 27 percent. The monthly bill for typical customer using 64.5 therms will increase by $11.68. Rates for commercial customers will increase by 32 percent, and for industrial customers by 34 percent. Cascade serves approximately 42,000 customers in Central Oregon.
The rate increases are part of annual adjustment the Commission makes to reflect the costs of purchasing gas for the next year. The companies make no profits on the pass through of the costs to ratepayers.
"We know this is going to be hard on some people, but these costs are not something over which the companies have control," said Commission Chairman Ron Eachus. "We make sure they’ve done everything they can to get the best deal, but they still have to buy their gas on the open market."
The companies sought the rate hikes earlier than usual after experiencing extremely high wholesale costs for natural gas which have more than doubled since February.
Several times in the past decade the adjustments have resulted in rate reductions, but increased demand for gas, especially to generate electricity, has been pushing prices higher.
In addition, a new pipeline has opened up the large Mid-West market for Western Canadian gas, increasing demand and price for what had traditionally been a low-cost supply for the Northwest. Northwest Natural buys nearly 80% of its supply from Canada.
The companies said they expected it would take two years before increased supplies from exploration efforts spurred by the higher prices will lead to declining prices.
The Commission called together representatives of Oregon utilities and consumer groups earlier this month to discuss ways to deal with the expected increase. Participants agreed to step up public awareness of rising utility bills, promotion of energy conservation options and the availability of financial assistance.
"This puts a premium on efficient use of energy, and the utilities and the state are both available to work with consumers to reduce energy use, " said Commissioner Roger Hamilton. "There’s lot of low cost options that can help offset the impact of this large an increase."
The increase could be especially noticeable during the winter months when residential customers' usage often doubles. Estimates are that for a gas heated home in a winter month such as January, a Northwest Natural customer could see a monthly bill increase of $19.81, Avista $15.12, and for Cascade $23.56.
The Commission and the Oregon Office of Energy are recommending consumers consider a variety of measures to lessen the impact of the rate increase, including:
- Contact the gas company to set up an equal payment plan to spread high winter bills over a 12-month period;
- Turning the thermostat down can save 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%.
- An energy audit by the utility that provide a customers heating can help mitigate the impact of the increase this winter and for years to come. Utilities are required to provide free energy audits. They also provide incentives such as rebates or loans, for recommended measures.
- Sealing cracks, gaps and other places where air leaks can generally result in a 10% heating and cooling savings.
- A full insulation job generally results in up to 30% savings on a heating bill.
- The Oregon Office of Energy offers state tax credits of up to $250 for residents who have an office-certified contractor seal furnace ducts. As much as 25% of the heat in a forced-air heating system may be lost through ductwork leaks.
- Updating low-efficiency furnaces with higher efficiency models can also make a difference. Some utilities offer a rebate for doing so. For example, Northwest Natural offers a $200 rebate for a high-efficiency furnace.
- Making sure the existing furnace operates efficiently can make a difference as well. Change or clean the furnace filter once a month during the heating season if needed. And a tax credit is available for testing and servicing gas furnaces if done by contractors certified by the Office of Energy.
A new brochure from the Office of Energy has more ideas for reducing energy bills at home. It can be obtained by calling 1-800-221-8035 or visiting www.energy.state.or.us.
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