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3 gas utilities list ups, downs in winter rates

CenterPoint heating bills to 421,000 to go up 5.24%

By David Smith

This article was published November 1, 2013 at 12:21 a.m.

Customers of three natural-gas utilities in Arkansas will pay from 6 percent less to 5 percent more on their heating bills this winter, the companies said in filings with the Arkansas Public Service Commission.

The three companies - CenterPoint Energy, Source-Gas Arkansas and Arkansas Oklahoma Gas - were required to file their winter rates by Thursday. The rates take effect today and end March 31.

Houston-based Center-Point, the state’s largest natural-gas company with about 421,000 customers, will raise its rate 5.24 percent this winter compared with last winter, its spokesman Alicia Dixon said Thursday.

That means a CenterPoint customer receiving a $100 monthly bill last winter will pay $105.24 this winter, assuming the customer uses the same amount of gas.

SourceGas, which has about 156,000 customers in Northwest Arkansas and across the northern third of the state, will lower its rate 6.16 percent this winter, the utility said in its filing with the commission Thursday.

For a customer with a $100 monthly bill last winter, the charge would drop to $93.84 this winter.

Arkansas Oklahoma Gas, which has about 45,000 customers in the Fort Smith area, is raising its bill about 1.4 percent for the next five months. An Arkansas Oklahoma Gas customer who paid a $100 monthly bill last winter will see it rise to $101.40 this winter.

The companies report their gas costs to the commission at the end of each October, and those rates are passed along to customers with no profit going to the utilities, said John Bethel, executive director of the commission’s general staff. The commission does not have to hold hearings to approve the rate changes.

Natural-gas prices have increased about 5.6 percent in the past 12 months, said James Williams, an energy economist who owns WTRG Economics near Russellville.

Natural-gas prices were $3.39 per 1 million British thermal units in the last week of October 2012, Williams said. For the last week in October this year, the price was $3.58, he said.

A Btu is the amount of heat required to increase the temperature of a pound of water 1 degree Fahrenheit.

“Last year was an extraordinary year for natural gas, not likely to be repeated,” Williams said.

In June last year, natural-gas prices dropped as low as $1.86 per 1 million Btu, Williams said.

“Those were historic lows for gas prices,” he said. “For us to expect similar prices, we just shouldn’t. Those prices [in June 2012] were lower than the cost of getting gas out of the ground.”

CenterPoint buys natural gas throughout the year and takes it out of storage for the winter,Dixon said.

“Some of this gas that will [be provided to] customers this winter was bought in the summertime, when prices were somewhat higher than they are currently,” Dixon said.

SourceGas’ rates dropped more than other utilities because its expenses, particularly transportation costs, for natural gas are low, said Rich Davis, SourceGas manager of business and governmental affairs.

“A majority of the gas we provide to customers comes from Arkansas,” Davis said, most of it from the Fayetteville Shale formation.

SourceGas also benefits from the fact that all its natural-gas pipelines are only in Arkansas, Davis said.

Natural-gas customers should expect to see higher bills for December, January and February and much lower bills for the remainder of the year, said Michael Callan, president of Arkansas Oklahoma Gas.

“Their monthly bills are driven more by temperature than anything else,” Callan said.

The National Weather Service expects this winter to be slightly cooler than last year, which was warmer than normal, said Julie Lesko, a meteorologist at the weather service’s office in North Little Rock.

Front Section, Pages 1 on 11/01/2013

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