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Idaho Gas Utility: Shale Driving Rate Reductions
Citing “prolific availability” of U.S. shale gas, Intermountain Gas Co. has filed with Idaho regulators for its fifth consecutive rate reduction tied to wholesale costs of gas.
Intermountain had a 5.3% rate decrease last October (see Daily GPI, Aug. 23, 2011). Most recently, Intermountain asked the Idaho Public Utilities Commission (PUC) to lower its rates by 4.5% effective Feb. 1 through Sept. 30, the PUC said. The PUC will take public comments on the natural gas-only distribution utility’s request through Jan. 19.
Along with the glut of low-priced domestic supplies tied to shale production, Intermountain cited record storage levels for gas nationally and the lack of production interruptions due to hurricanes this past storm season, along with cold weather boosting utility sales as all contributing to the continuing downward trend in retail rates.
Completion of El Paso’s Ruby Pipeline was yet another factor contributing to the rate decrease, according to the utility’s filing to the PUC. “The Ruby Pipeline has displaced other traditional natural gas supplies and softened prices at the Alberta Energy Co. hub [AECO] that makes up a significant portion of Intermountain’s gas supply portfolio,” said the PUC.
If approved by the PUC, Intermountain’s portion of rates covering natural gas supply and transportation would decline from 45.35 cents/therm to 41.8 cents/therm. The gas and transportation part of the utility’s rate represents about half of its overall summer/winter retail charges of 86 cents/therm and 75 cents/therm, respectively.
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