PNG to lower summer natural gas rates
PINEDALE – The county’s natural-gas customers who reeled over shocking rates to heat homes and businesses over the recent cold, blustery winter will get a rate reprieve, in time for summer.
On April 25, the Wyoming Public Service Commission approved Pinedale Natural Gas owner Steven Shute’s request to decrease gas rates.
Shute referred back to the unexpected “panic run-up and unjustified $50 index in January” at the very end of December – record-high sales that immediately affected everyone west of Denver.
“Pinedale got nailed for an extra $500,000 for 1,800 customers, so you can imagine what 12 million California homes had to pay extra for gas heat, plus half their electric generation at 10 times the expected fuel cost,” he noted in February.
The past “bitter winter was about 18 percent colder than recent averages,” Shute said in his April summary for PNG customers.
Customers were relatively secure for a decade with delivered fuel costing about 75 cents per Therm delivered, he said. A Therm is 100 cubic feet of natural gas.
In 2021, the gas market fluctuated due to world events and last year, Russia’s invasion of Ukraine set off unpredictable ripples.
“Because of this uncertainty, in September 2022, PNG took the unusual step of ‘hedging ‘or pre-purchasing most of its expected winter usage,” he summarized. “While PNG paid a premium for the ‘hedged’ gas, it was to provide price stability to customers.”
PNG “saved” about $1.5 million in gas costs but still incurred about $800,000 more in gas costs than normal. Those costs need to be recouped and the newly approved rates reflect how and when customers can expect that to take place, he said.
From August into December 2022, PNG rates were $1.17 per Therm.
From January through April, PNG had to charge $1.45 with an emergency 20-cent surcharge “for the December-January-February price blowup,” he said.
Starting May 23, the new WPSC-approved rate will be $1.12 / Therm with a 10-cent surcharge, Shute said.
“While natural gas costs for customers in the West remain higher (40 to 60 cents /Therm) than normal, other parts of the country are paying substantially less (20 to 30 cents/Therm). There is not an explicit reason for this disparity in the price,” he summarized.
“PNG expects this situation to ease somewhat, with rates under $1.00 / Therm, especially if regulatory bodies carefully examine the Western markets,” he said. “Given this fluctuation, PNG filed an application with the WPSC to better track the costs of gas and ensure that customers are paying an equitable price for gas.”