Rate cut asked by Columbia

9/28/2001

In what should be heart-warming news to northwest Ohio residents, Columbia Gas of Ohio has proposed a winter rate that is a third less than last winter and 20 percent less than its current price.

The major natural gas utility in the Toledo area has asked the Public Utilities Commission of Ohio for permission to drop its customer rate, effective Oct. 26, to 48 cents per 100 cubic feet for the next three months, down from its current 60 cents and from the year-ago level of 74 cents.

The drop would mark a significant change from last winter, when cold, snowy weather in December, plus a rate that was up substantially from normal, sent heating bills rising early in the winter.

The proposed rate, if approved, would be for November, December, and January. A new rate in February could climb substantially, as happened last winter, when the 74-cent rate soared to 86 cents per ccf, producing even higher monthly heating bills for homeowners and businesses who were struggling to pay prior bills.

Based on average usage, a typical monthly bill for the next three months will be $106, a Columbia Gas spokesman said. The higher rate and colder weather last December meant monthly bills of $300 or more for many residents.

Columbia Gas transmits natural gas to about 170,000 area residents, although nearly half purchase their gas through an independent supplier. Rates for customers who have switched will not be affected unless their contract pegs a price off of the Columbia Gas rate.

The utility, by law, adjusts its rate every three months, dependent on what it is paying for its natural gas supplies. Its request is reviewed by the PUCO, which typically grants it. The regulatory panel will act in a few weeks.

‘‘The market worked and the supplies are up, so we're asking for a lower price,'' said Columbia Gas spokesman Gina Thompson.

Until about 18 months ago, natural gas prices locally typically ranged from about 35 to 55 cents a ccf. But increased demand from more business use and new standby electric power plants fueled by natural gas pinched limited supplies, which bounced up prices. Natural gas suppliers could not find and extract more natural gas from wells quick enough, which meant suppliers needing more gas to fulfill contracts paid hefty prices, thus boosting the retail price.

However, big efforts to increase supplies, plus declining business use from the slowing economy, eased the crunch, resulting in sinking prices. Still, industry experts even as recent as summer predicted that prices could start rising this fall and were not expected to be nearly as low as two years ago. Columbia Gas's proposed new rate is nearly identical to what it charged two years ago.

“I think market prices for natural gas have surprised everybody in this industry that they have gone so low,” said Michael Anderson, director of supply planning for Columbia Gas.

Officials of the utility, which has 1.3 million Ohio customers, predict lower natural gas prices through the winter, barring unusually cold weather or some other event to interrupt supplies.

The Associated Press contributed to this story.