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Prices going up for Puget Sound Energy natural gas customers

COVID-19 pandemic increases natural gas prices

Natural gas prices are going up for Puget Sound Energy customers.

The typical PSE residential customer using 64 therms a month will see an increase of 8.46% or $5.46 per month for an average monthly bill of $70.44, according to a Oct. 29 news release from the Washington Utilities and Transportation Commission. The rate hike begins Nov. 1.

The Olympia-based Washington Utilities and Transportation Commission on Oct. 29 approved rate increases of nearly 8.5% for NW Natural and PSE natural gas customers. Cascade and Avista natural gas customers will see slight rate decreases.

Higher customer gas costs in part reflect increases in natural gas market prices. Due to the COVID-19 pandemic, production of natural gas has slowed while demand has increased, resulting in increased costs for Washington utilities.

PSE’s rate increase is due to higher-than-expected costs over the last year as well as higher natural gas prices projected for the upcoming year. Bellevue-based PSE provides natural gas service to more than 800,000 customers in six Washington counties: King, Kittitas, Lewis, Pierce, Snohomish and Thurston.

Natural gas companies must submit Purchased Gas Cost Adjustment (PGA) filings at least every 15 months to adjust rates based on the constantly changing cost of natural gas in the wholesale market. The cost of gas purchases are passed on to customers; companies do not profit from or lose money on gas purchases.

The variation in gas rates among Washington’s investor-owned utilities is due to regional differences in monthly residential usage, supply sources, conservation and energy efficiency programs, low-income program costs and company gas purchasing practices.

The UTC regulates the private, investor-owned natural gas utilities in Washington. It is the commission’s responsibility to ensure regulated companies provide safe and reliable service to customers at reasonable rates, while allowing them the opportunity to earn a fair profit.

Other natural gas price adjustments include:

• Avista Corporation

The average bill for a typical Avista residential natural gas customer using 66 therms will decrease by 0.1%, or $0.08 a month, for an average monthly bill of $56.35.

Avista projects an annual $2 million increase in costs due to increased natural gas prices, but when offset with the credit to customers for the over-collection of gas costs over the past year, the net result is a rate decrease for customers. Spokane-based Avista serves nearly 172,000 natural gas customers in Eastern Washington.

• Cascade Natural Gas

The typical Cascade residential customer using 56 therms a month will see a decrease of 0.8%, or $0.46, for an average monthly bill of $56.26.

Though Cascade’s costs were higher than expected over the past year, the rate impact is entirely offset by a balance owed to customers through Cascade’s decoupling mechanism, under which the utility’s recovery of fixed costs does not depend on the volume of its gas sales. Kennewick-based Cascade serves more than 220,000 residential and business customers in 68 communities throughout the state, including Aberdeen, Bellingham, Bremerton, Kennewick, Longview, Moses Lake, Mount Vernon, Sunnyside, Walla Walla, Wenatchee and Yakima.

• NW Natural

The typical NW Natural residential customer using 57 therms a month will see an increase of 8.4%, or about $4.53 a month, for an average monthly bill of $58.71.

NW Natural’s rate increase is due to higher gas market prices as well as the elimination of tax credits related to the Tax Cuts and Jobs Act. Portland-based NW Natural provides natural gas service to about 86,000 residential, commercial, and industrial customers in Southwest Washington.


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