The Public Service Commission (PSC) of West Virginia expects the state’s consumers to pay less this winter for natural gas after reviewing purchased natural gas cost adjustment requests from leading utilities.
The PSC said natural gas utilities that serve nearly all of the state's customers have filed requests to lower the purchased gas portion of their rates, reflecting falling natural gas prices in the region that have been pushed lower by rising production from the Marcellus and Utica shales.
Mountaineer Gas Co. has asked for a decrease of $1.255/Mcf, or nearly 20%. Generally, the PSC said, Mountaineer Gas customers using an average of 7 Mcf/month would see their monthly natural gas bills decline by $8.79. Dominion Hope Gas has requested a 41.5% decrease, or $1.94/Mcf; Bluefield Gas has requested a decrease of $2.198/Mcf, and Peoples Gas has requested a decrease of $2.33/Mcf, or 41.1%.
While the marketplace determines the price of natural gas, the PSC examines the gas purchasing practices of utilities to ensure a reliable gas supply at the lowest market price.
The gas rates of customers in West Virginia are adjusted annually in a proceeding before the commission.
While the price of natural gas delivered to residential customers in Ohio, West Virginia and Pennsylvania has been consistently higher than other states with more demand, data shows purchased gas cost rates have declined. Late last year, the Pennsylvania Public Utility Commission said those prices have declined by as much as 45-50% since 2008, while Energy Information Administration data shows a similar trend in Ohio.
The decline in purchased gas cost rates has been attributed to the steep rise in natural gas production in the Appalachian Basin. In 2013, the latest period for which data is available, conventional and unconventional natural gas production in West Virginia was 741.9 Bcf, up from 539.5 Bcf the year before (see Shale Daily, Feb. 12). Combined production in Ohio was 518 Bcf in 2014, while unconventional production alone in Pennsylvania was 4 Tcf (see Shale Daily, March 24;Feb. 17).