Saying wholesale gas prices have fallen considerably in the past two months, Spokane, WA-based Avista Utilities Monday refiled its gas cost offset rate adjustment with Oregon regulators, seeking a 4.1% decrease effective Nov. 1 in place of an overall 2% increase it had originally sought last August.

If the request is approved by the Oregon Public Utility Commission (PUC), a residential customer using an average of 53 therms of natural gas monthly would see their monthly bill decrease by $3.28, or 4.1%, for a revised bill of $76.79, Avista said. Annual purchased gas adjustment (PGA) filings pass through changes in Avista’s natural gas costs and do not impact company earnings.

Avista’s refiling of the case at the Oregon PUC represents a complete turnaround from what utilities were predicting last July at an annual natural gas forum conducted by the state regulatory commission. At that time, the three major natural gas distribution utilities serving Oregon told energy officials and stakeholders to expect retail natural gas prices to increase this winter in the range of 10-40%, with the state’s biggest distributor predicting hikes in the 35-40% range (see Daily GPI, July 17).

“Wholesale natural gas prices have fallen considerably since that time, enabling Avista to refile its request for a decrease,” said Avista, stressing what has become an industry norm — that wholesale gas prices fluctuate as a result of many factors, similar to the price of crude oil. “To manage price volatility, Avista pre-purchases about two-thirds of the gas needed to meet customer demand for the coming winter.

“While prices may fluctuate, the efficiency of natural gas remains constant, about 90%, especially when used directly in space and water heating systems,” said the combination utility that operates in three Northwest states (Washington, its main state, along with and Idaho). Avista serves about 351,000 electric and 310,000 natural gas customers in the three states.

Oregon receives the bulk of its gas supplies from Western Canada and the U.S. Rockies, but PUC officials last summer were worried about what they called “wild cards” that could push prices even higher; extensive hurricanes that disrupt Gulf of Mexico supplies and any unforeseen major interstate gas pipeline disruptions. The storms’ impact this year has been mild compared to the economic hurricanes that have blasted Wall Street and the world’s other financial centers.

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