A medium-size natural gas utility and a small propane distributor received approval from the Arizona Corporation Commission (ACC) Tuesday to implement separate purchased gas adjustor (PGA) credits for their customers. UniSource Energy Corp.’s UNS Gas utility and Semstream Propane will be allowed to adjust rates depending on the swings in the wholesale costs of their respective fuels.
The credits, dropping monthly charges for the customers of both companies, will be spread from Nov. 1 this year through October next year. Impacted are UNS’s 144,000 customers spread over six counties, and Semstream’s 7,500 customers concentrated in an area near Payson, AZ, about 75 miles north of Phoenix.
A credit of 8 cents/th was approved for UNS Gas customers, meaning an average gas utility customer’s bill would be reduced by an estimated average of $5.85/month during the five highest-usage (winter) months and an average of $1.28 monthly during the five lowest-use (summer) months, the ACC said.
“Because the price of natural gas can vary dramatically over a short period of time, possibly taking the bank balance to zero sooner than expected, the period of the credit is set at 12 months or until the bank balance reaches zero, whichever occurs first,” said an ACC spokesperson.
The credit for Semstream customers will be 45 cents/th, projected to stay in effect through October 2010. “If propane prices move noticeably higher or lower than expected, the PGA bank balance could reach zero before or after October next year,” the spokesperson said. “Therefore, staff recommends that the PGA credit end the first month after June 2010 where the PGA bank balance has reached zero.”
An average Semstream residential customer stands to see about a 20.7%, or $25.20, reduction in monthly bills, dropping them to about $96.49/month, the ACC said.
“In this tough economy, it’s important for utility companies to rebate monies back to their customers immediately, when it’s due to them,” said ACC Chairman Kris Mayes. “The credits will help make natural gas and propane more affordable this winter.”
Many of the ACC’s other four elected members echoed the same sentiments, although Commissioner Paul Newman warned that while welcoming the cost reduction now, the regulators and consumers need to “continue to plan ahead for when the cost of natural gas rises again.”
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