Following an initial review of the “Purchased Gas Adjustment” cases filed recently, the Public Service Commission of West Virginia is expecting lower gas bills for two thirds of the State’s residents for the upcoming heating season.
Eight of the twelve natural gas utilities operating in the state have filed requests with the Commission to lower the purchased gas portion of their rates. Mountaineer Gas Company, the largest natural gas utility in the State, has asked for a decrease of $0.315 per Mcf, or 6.55 percent. Typical residential customers of Mountaineer Gas who use an average of 7 Mcf per month would see their monthly bills decrease by $2.21. Interim rates will go into effect November 1, 2016.
By law, gas utilities are permitted to recover their costs to purchase natural gas. The gas rates of customers are adjusted annually to account for the cost of gas in a process called a Purchased Gas Adjustment (PGA) proceeding before the Commission. The PGA is an estimate of expected prices utilities will have to pay for gas from their suppliers for the period of November 1 through October 31 of the following year, as well as a “true up” of actual costs for the previous year. The PGA does not include any profit for the utility.
The Commission does not regulate the wholesale price of natural gas; that price is determined by competitive markets. The Commission does examine the gas purchasing practices of gas utilities and ensures the utility did everything possible to obtain a reliable gas supply at the lowest market price.
