Natural gas price rising for Richmond customers
Jeremy Lazarus | 9/30/2016, 7:14 p.m.
The cost of natural gas — the fuel most Richmond residents cook and heat with and that many businesses use — is going up for the first time in more than two years.
Effective with October bills, the purchase gas cost, or PGC component of the gas bill, will increase by 38 percent, from the current $3.25 per 1,000 cubic feet to $4.50 per 1,000 cubic feet, according to Robert Steidel, director of the city Department of Public Utilities.
Mr. Steidel said the department has no choice but to pass on to customers the higher cost it has started to pay to buy natural gas.
Still, it is a blow to residents and commercial accounts who have seen their bills shrink.
The new PGC will result in an increase of $8.75 a month for the average residential customer, Mr. Steidel stated. According to DPU, the average residential customer uses 7,000 cubic feet of natural gas a month.
If the city sold natural gas by the gallon, the PGC increase would raise the retail price of natural gas from the current $1.61 a gallon to $1.72 a gallon in Richmond, said David Daughtry, DPU’s fuel procurement administrator.
Despite the price hike, natural gas will be far less expensive than heating oil, for which customers are now paying between $2.40 and $2.60 a gallon in the Richmond area, a survey of fuel dealers found.
Still, the price increase reverses the trend. DPU dropped the PGC to its current level last December during last year’s warmer than normal winter.
Mr. Daughtry said the price of natural gas shot up in July as power plants that increasingly use the fuel pumped out more electricity to meet demand for air conditioning.
With forecasts for a more normal winter, the U.S. Energy Information Agency projects the price of natural gas to remain above the remarkably low levels of last winter and spring.
However, looking ahead, Mr. Daughtry and other DPU officials expect the price of natural gas to remain relatively stable during the upcoming heating season that will begin in November. If that proves correct, customers are unlikely to see another price hike in coming months, they said.
DPU spokeswoman Angela Fountain said that the utility is ready to help customers manage their bills and urged people who are struggling to contact the department “before bills become unmanageable.”
Among other help, DPU offers a plan to help spread payments over 12 months.
Low-income residents also are encouraged to apply through the city Department of Social Services for government and private assistance with fuel bills.
DPU also offers its MetroCare Program, which Ms. Fountain said provides funds to families and individuals who are having trouble paying heating bills.