Portland, OR-based Northwest Natural Gas Co. Monday activated a $109 million annual retail rate increase, or an average of 20% for customers in Oregon, reflecting the natural gas utility’s reliance on mostly long-term, fixed-price supply contracts costing about $322 million signed early in the year when wholesale prices hovered in the $4 to $5/MMBtu range.

Meanwhile in Nevada, Las Vegas-based Southwest Gas Corp. is preparing to file a cost-of-gas rate decrease with state regulators before Dec. 1 to help offset a general rate increase targeted for Jan. 1, 2002.

A Southwest spokesperson said Monday that the utility’s gas-buying balancing account is still under-funded, but with prices substantially down, the company expects to begin accumulating a surplus of funds by next month, allowing it to file for a decrease before the end of the year. Southwest serves. Unlike in neighboring California, Nevadautilities are not allowed to adjust retail rates monthly to reflect changes in the wholesale cost of supplies from the southwest and RockyMountain basins.

Northwest Natural receives about 75 % of its supplies from PG&E’s Northwest Transmission Pipeline bringing supplies from western Canada and the rest through Williams’ Northwest Pipeline bringing RockyMountain supplies.

“It is strictly a cost-of-fuel rate adjustment,” said Northwest’s Steve Sechrist. “Under the system we have in Oregon, we do this once a year as part an early track of gas costs year-to-year.” Northwest last year delivered 1.2 billion therms to its customers, Sechrist said.

“Today, the [wholesale] price of gas has come down quite a bit, but the reason it doesn’t figure into these rates because we normally do all of our gas buying the first half of the year, so we bought it at the beginning of year before prices started coming down substantially. The gas we committed to for the customers this year actually is higher than what we bought a year earlier. We bought very little spot market, given the historically high prices we were facing.”

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