The Tribune Democrat, Johnstown, PA

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December 30, 2013

Gas rates going up

JOHNSTOWN — The new year will bring higher gas rates for Peoples Natural Gas customers.

On Wednesday, the gas company’s recovery rate will increase from $4.32 per 1,000 cubic feet to $5.11 per 1,000 cubic feet – an increase that follows two consecutive quarters of decreases, company officials said Monday.

“What it means for our average residential customer is that the typical $75 monthly bill will be going up to $81.60,” said Joe Gregorini, Peoples’ vice-president of rates and regulatory affairs.

The regulatory rate represents about half of a customer’s bill. The increase will add approximately 8 percent to the total bill, Gregorini added.

Peoples Natural Gas spokesman Barry Kukovich said Peoples’ recovery rate reflects what the company is paying for natural gas – and expects to pay in the coming months. In this case, it reflects the fact a chilly, early start to winter that has driven up the demand for natural gas and its prices, Gregorini said.

“There’s no mark-up or profit on this rate. It reflects on what we’re paying for natural gas,” he said.

A Marcellus Shale boom and increased gas production in many parts of the state has kept gas prices low in much of Pennsylvania.

Kukovich noted that the recovery rate was $10.66 per thousand cubic feet of gas five years ago, more than twice the new rate.

Still, the rate fluctuates from quarter to quarter and year to year based on other factors including demand, which can rise and fall based on temperatures.

Heading into the first quarter of 2013, Peoples set a rate of $4.62 per thousand cubic feet.

Gregorini said some Peoples customers, those purchasing natural gas from third party suppliers, won’t be impacted by the rate adjustment.

While Peoples continues to transmit the gas to all gas-ready homes in the region, customers can buy gas from other suppliers through their Energy Choice program.

“We continue to push that program for people. It’s another option customers have,” Gregorini said.

Peoples’ recovery rate will remain in effect through March 31.

David Hurst is a reporter with The Tribune-Democrat. Follow him on Twitter at www.twitter. com/tddavidhurst.

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