Quantcast

Natural gas getting cheaper in Richmond

Jeremy M. Lazarus | 2/10/2015, 5:02 p.m.
Heating and cooking with natural gas just got a little cheaper in Richmond. Effective with February’s bills, the cost of …

Heating and cooking with natural gas just got a little cheaper in Richmond.

Effective with February’s bills, the cost of the fuel is being lowered again, saving the average residential customer about $6 a month, the city Department of Public Utilities just announced.

It’s more good news for consumers who also are enjoying cheaper gasoline prices to fuel their vehicles.

The lower natural gas bills will result from an additional cut in one element of the bill — the purchased gas cost (PGC), or the amount the department charges customers for the fuel it purchases on the wholesale market, according to DPU Director Robert Steidel.

Despite recent heavy snows up North, natural gas use is down, while production has risen, according to the federal Energy Information Agency.

The result: A collapse in the wholesale price, according to the information agency. The drop in wholesale price allows communities, electric plants and other natural gas users to buy natural gas at a cheaper rate and pass the savings on to retail customers.

Natural gas prices are expected to stay low for the foreseeable future, the agency stated in its most recent report.

Natural gas is sold in cubic feet. Converted to gallons, the new PGC charge means customers will be paying less than $1.30 a gallon when all the bill elements are figured, including a distribution charge, a customer charge and taxes.

That’s a bargain compared with heating oil for furnaces that is still selling for more than $2.80 a gallon, a weekly report on Virginia fuel prices indicates. Some people are still paying as much as $3.09 a gallon in Richmond.

The new, reduced PGC charge almost wipes out the 31.5 cent increase that went into effect in August, when DPU faced a deficit. As a result of stronger than expected sales and lower prices,

DPU started rolling back that increase in November when Mr. Steidel cut the PGC rate from 81.5 cents per 100 cubic feet of gas to 65 cents per 100 cubic feet.

He stated the new PGC price beginning this month would be 57.5 cents per 100 cubic feet, down 7.5 cents from the November PGC charge.

The current charge is still 15 percent higher than a year ago when DPU’s PGC charge was 50 cents per 100 cubic feet or 7.5 cents less.

Based on the current outlook, Mr. Steidel might well cut DPU’s PGC charge again in May. He is now reviewing the PGC charge every three months instead of waiting a full year.