Arkansas' natural-gas utilities will raise their rates 1.97 percent to 8.73 percent because of an increase in the costs to acquire natural gas, spokesmen from the companies said Tuesday.
The three companies -- CenterPoint Energy, Black Hills Energy and Arkansas Oklahoma Gas -- are required to file their winter rates each year by Oct. 31 with the Arkansas Public Service Commission. The rates take effect today and end March 31.
The utilities are allowed to pass along their gas supply rate -- basically the cost of acquiring natural gas -- to customers but they cannot take a profit. The gas supply rate includes what the utility pays its suppliers for natural gas.
The residential bill for CenterPoint, the largest gas utility with about 413,000 customers in Arkansas, will rise 8.73 percent compared with November last year, said Alicia Dixon, a CenterPoint spokesman.
That means a CenterPoint customer with a $100 monthly bill last November will have a bill of $108.73 beginning with this month's bill, assuming the same usage.
Not all of the rate increase is attributed to natural-gas prices. Part of the increase, $1.16, is for an energy efficiency surcharge that the commission approved for CenterPoint, Dixon said.
The biggest portion of the increase in the monthly bill, about 70 percent, is CenterPoint's gas supply rate, Dixon said.
Black Hills Energy's approximately 166,000 customers in northern Arkansas will see a 5.56 percent increase in monthly bills compared with November last year, said Rich Davis, manager of state government affairs.
That means a customer with a $100 bill for November last year would pay $105.56.
The Public Service Commission allows the utilities to include various surcharges, including one for energy efficiency.
Between last winter and this winter, Black Hills acquired dry storage wells in the Arkansas River Valley near Ozark, Davis said.
"This allows us to take gas off the interstate pipeline in the summertime when prices are the cheapest and put it into storage," Davis said. "When the weather gets cold and our customers have [higher] demand, we're drawing off that storage well instead of whatever the market price is. That's good for the customer."
Arkansas Oklahoma Gas' approximately 45,000 customers in the Fort Smith area will see a 1.97 percent increase in their monthly natural gas bill compared with November last year, said Kim Linam, president of Arkansas Oklahoma Gas.
That means a customer with a $100 gas bill last year would see it rise to $101.97 with the same usage.
The actual cost of natural gas has dropped about 10 percent from November last year to this year, said James Williams, an energy economist who owns WTRG Economics near Russellville.
"But I suspect we'll end up being a little higher than last year through the winter," Williams said.
Natural-gas prices were $3.14 per million British thermal unit about 12 months ago, Williams said. This year, the price was about $2.84, he said.
Btu is the amount of heat required to increase the temperature of a pound of water 1 degree Fahrenheit.
The National Weather Service projects that temperatures will be higher than average this winter, said John Lewis, senior forecaster at the service's office in North Little Rock.
The forecast anticipates that conditions will be drier and warmer than normal across the South.
But the past two winters have been warmer than usual and there never have been three consecutive warmer-than-average winters in the South, Lewis said.
A Section on 11/01/2017