Portland, OR-based Northwest Natural Gas Co. filed Thursday for rate changes with regulators in Oregon and Washington state.

Northwest Natural asked the Oregon Public Utility Commission (PUC) to approve a slight rate increase, effective Nov. 1, to reflect estimates for wholesale gas purchases in the coming year. It asked for a decrease, however, in a filing to the state of Washington Utilities and Transportation Commission (WUTC) also to be effective Nov. 1.

The proposed decrease for its Washington state customers would amount to 0.8% for residential customers and 1% for businesses, with the average home seeing a decrease of about 59 cents/month and just a penny more than $3/month for commercial customers. As part of the Washington regulatory process, Northwest Natural said it will file revised estimates in early October to reflect more current wholesale gas costs.

In Oregon, the gas utility is seeking a 0.1% rate hike, meaning about six cents/month more for a typical residential customer. For businesses, the increase also would be well under a buck at about 30 cents/month. Similar to Washington's process, Northwest will file updated figures with the Oregon PUC in early October.

Northwest's annual gas cost filings reflect volatility in the wholesale gas market and most of the changes since last year have been downward. The utility experienced substantially lower wholesale prices in 2009, resulting in a 14% drop in Oregon rates; in Washington, the lower wholesale prices meant a 21.5% rate decrease.

While average prices spread over a year or multi-year periods will remain stable, during shorter periods wholesale natural gas prices are expected to continue to have wide swings, according to Northwest Natural's head of gas supply, Randy Friedman, who spoke earlier this summer at a meeting of the Oregon PUC examining the outlook for gas in the Pacific Northwest (see Daily GPI, July 1).

More recently, Friedman told the WUTC that "barring any extreme events," he expects wholesale gas prices to "stay low as we continue to buy supplies for the coming heating season, which should reduce the numbers even more for our final filing in October."

Northwest Natural CEO Gregg Kantor attributes the stable pricing outlook to "a slow economy and abundant domestic gas supplies." This situation is allowing the local distribution company to "buy low and pass those savings on to our customers." Kantor predicted that his winter his utility's customer's should be paying about the same prices they did in 2004.

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