Columbia, Dominion Peoples and Equitable -- the Pittsburgh area's three biggest natural gas distribution companies -- have hiked their rates by about 18 to 31 percent for the next three months, based on what they expect to pay for gas to supply their customers. Equitable said Monday it wants to increase its gas delivery rate.
The new rates are in line with what other utilities statewide plan to charge during the year's third quarter -- when prices typically drop or stay the same due to low demand, said Pennsylvania Consumer Advocate Sonny Popowsky.
"I'm afraid we're headed for another catastrophic year, in terms of natural gas prices," he said.
Unlike the winter of 2005, when hurricanes disrupted gas flow from the Gulf of Mexico and led to temporarily spikes, today's prices simply are trending upward.
Natural gas futures have risen 97 percent in the past year, following crude oil prices. For residential gas customers, "That is going to hit home in December and January," Popowsky said.
Dominion Peoples customers who annually use 98,000 cubic feet of natural gas can expect their monthly bills to rise by almost 23 percent to $163.32. The company raised its purchased gas cost by a similar percentage in April.
Columbia's increase for the July to September quarter is 31 percent, which brings a bill for comparable gas usage to $167.86. Equitable's increase of almost 18 percent would result in a $174.64 bill.
Together, the three companies serve more than 900,000 customers. They listed several reasons for rising costs:
• Demand for natural gas is rising, as industries that can switch from oil to gas and other fuels do so.
Temperatures in the region changed rapidly from cold to hot this spring, prompting customers to use their furnaces longer, then switch to air conditioners that run on electricity from gas-fired power plants.
Those factors and other market conditions have caused supplies of gas in storage to hit five-year lows.
"It all comes down to basic supply and demand, and there still is pretty considerable demand" for the fuel, said Rick Gordon of Gordon Energy Solutions LLC, an oil and gas consulting firm in Kansas City, Mo. Long-term, gas wells being drilled in Pennsylvania and other states could help to lower prices somewhat, he said.
For now, customers like Tim Nuttle are doing what they can to trim bills. A professor at Indiana University of Pennsylvania, Nuttle had a home energy audit done and has added insulation to his 138-year-old home in the North Side's Mexican War Streets.
An Equitable customer, he's considering a more efficient furnace, a tankless water heater and valves for his radiators that control the temperature room by room.
"There's a lot of complaining -- people want the government to do something (about energy costs), but they don't want to do anything themselves. I'm saving hundreds of dollars with a few simple things," he said.
Equitable, meanwhile, asked state utility regulators yesterday to approve a $51.9 million-a-year increase in its delivery rate, the North Shore-based company's first increase in that part of a customer's bill in 11 years.
The hike -- which would raise most bills by around 10 percent -- is proposed to take effect Sept. 30, though a state Public Utility Commission review likely will delay it, and result in a lesser increase.
Equitable spokesman David Spigelmyer said nearly one-third of the planned increase is needed to cover the cost of the state-mandated program to help financially troubled customers pay their bills. About 19,000 customers are in the program, he said.
The company has faced higher costs to maintain and update pipelines and other equipment. About $30 million a year is invested in upgrading the system, he said.
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