After recent years of rate decreases, Idaho regulators approved purchased gas adjustment (PGA) rate increases on Wednesday for the state’s two major natural gas utility distribution companies: Spokane, WA-based Avista Utilities and Boise, ID-based Intermountain Gas Co. The rate changes are effective Tuesday (Oct. 1).
For Intermountain Gas, the increase approved by the Idaho Public Utilities Commission (PUC) is its first gas cost rate hike in five years, following decreases ranging from 22.2% in 2009 and 7.1% last year. Normally, the PGA is adjusted annually at the start of October, but the PUC leaves open the possibility for other gas cost rate changes during the year if those costs shift significantly.
The PUC allowed Intermountain to implement a $10.3 million rate hike, or 4.15%, overall. For residential customers, the increase amounts to slightly less than $2/month, and for commercial customers it means an average increase of a little more than $14/month, the PUC said.
“The increase this year is primarily due to an increase in transportation costs billed to the utility by the Northwest Pipeline Co., and an increase in weighted average cost of the gas commodity,” said a PUC spokesperson. Even after the increase, the utility’s PGA portion of gas rates is still 49% lower than it was in 2005, the PUC said.
Similarly, Avista Utilities was given about a 6.8% jump in its PGA rates, or something in excess of $4 million annually. The combination utility, which also received a less than 1% fuel cost adjustment for its electric utility customers, had asked for $4.9 million, or 7.5%, for its retail gas utility customers.
Like in the case of Intermountain, the regulators attributed the Avista increase to “changing market prices for fuel and transportation.” In making its request to the PUC last July, Avista attributed the change from recent decreases to “a return to a more balanced natural gas market that added uplift on wholesale prices.”
“In recent years, lower demand for gas, higher production rates and record high storage levels drove prices to the lowest they had been in a decade,” the PUC spokesperson said. “However, for most of 2013, prices began an upward trend, caused primarily by the late, colder-than-normal winter.”
As a result, the PUC authorized Avista to increase its PGA rate from 33.3 cents/therm to 37.4 cents/therm.
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