Consumer cost holds despite natural gas price decrease

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Joann Stoddard, 79, isn't surprised to see her home gas bill go up in the wintertime.

However, she was surprised to learn that her gas bill is staying high this winter while the wholesale price of natural gas is going down.

"Well, I guess we can be glad to have a little bit milder winter," Stoddard said.

The wholesale price of natural gas, which is pumped to residential and commercial properties and burned for heating, dropped by about 35 percent from March 2008 to December 2008, according to Moffat County's account of a local well's proceeds.

In that time, Atmos Energy, which city records show is the sole gas utility provider in Craig, has issued two rate increases totaling 24 percent.

Kevin Kerrigan, Atmos manager of public affairs for the Colorado-Kansas Division, said his company applied for the rate increases because of unstable market conditions.

"When we file (for rate increases with the Colorado Public Utilities Commission), we have to project pretty far for what natural gas costs are going to continue to be," he said.

Atmos looks at its previous year's profits and the next year's profit projections when it applies for rate increases, Kerrigan added.

"In June, when we saw what the volatility of the market was doing, we were way behind," he said.

Consumer prices have not followed the wholesale trend because of how Atmos must plan for winter, Kerrigan said.

The company signs 50 percent of its wholesale gas contracts before the season begins so it can guarantee to its customers that they will have heat, he said. It uses the other 50 percent to balance its prices, which is how the company has been able to sell gas for less than the consumer cost seen in fall 2008.

Consumer prices never will be as low as wholesale prices because of distribution and transportation costs, Kerrigan added.

Price help may be on the way, however, though it may not come until next winter.

"Now we're in a situation where we see natural gas prices coming down, thankfully," Kerrigan said. "I can't quote a month when we'll be able to file for a reduction, but we'll do it at the first available chance, let me put it that way."

Kerrigan also said his company wants its customers to be aware of help available, such as the Low Income Energy Assistance Program and Energy Outreach Colorado, which provide some financial relief for heating bills.

For more information on both, call 1-866-HEAT-HELP.

Atmos also offers up to $1,000 in rebates for customers who upgrade their home-heating units to more efficient systems. Residents can visit www.excessisout.com for more information.

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