As natural gas prices continue to fall due to mild weather this winter, AGL Resources subsidiary Virginia Natural Gas (VNG) last week announced a 13% reduction in the company's purchased gas costs (PGC), which will save the average residential customer a total of $44 in February and March.
"We want to do everything we can to help our customers this winter," said Hank Linginfelter, president of VNG. "Thanks to some well-timed decisions, our superb asset management program, and the good fortune of warmer weather, our gas costs are moderating. We want to pass along these savings to customers with their first bills in February."
As part of a stipulation to reach a decision on the company's rate freeze and performance-based-regulation proposal before the Virginia State Corporation Commission (VSCC), VNG committed to tap its lowest cost gas storage assets to reduce costs. In addition, the company will accelerate the sharing of money available to the company under its VSCC approved asset management program. In 2005, the program generated about $5 million, which the company will credit to customers during the first quarter of 2006.
"As a result of recent market conditions and the accelerated payout schedule, the asset management plan, especially this year, is a tremendous benefit for Virginia Natural Gas customers," said Linginfelter.
Managed by Sequent Energy Management, another AGL Resources company, VNG said the progressive value sharing program has saved its customers roughly $17 million in gas costs since 2000. With the 13% reduction from the previously filed rates for the first quarter of 2006 for the PGC portion of customer bills, the average residential customer will save $44. The average residential customer bill for the first quarter of 2006 using rates in effect beginning in January would have been $332. Using the rates approved Thursday, the average residential bill for the first quarter is projected to be $288.
"While energy costs still remain high, the warmer than usual weather, which has brought natural gas prices down, allows us to take this step now," Linginfelter explained. "This is reflected in our reduction in gas costs as well. We want to make these cost savings available to our customers when they need them most this winter."
VNG provides retail natural gas sales and distribution services to 265,000 customers in southeast Virginia.
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