Greeley Gas proposes rate increase for residents
August 5, 2002
A proposed change in the Greeley Gas rate structure is good news for commercial accounts, even while it represents the fifth increase since February of 2000 for residential accounts.
The change could mean a savings of $10.20 a month for the average commercial account and an increase of $1.20 a month for the average residential account.
The Colorado Public Utilities Commission meets Wednesday to determine whether a new fee structure proposed by Greeley Gas is fair. It was determined last year that Greeley Gas was entitled to a $4 million increase. This week’s action is to determine whether the proposed changes are equitable, according to PUC Spokesman Terry Bote.
“This is Phase II in a rate case that was approved last year,” he said. “It doesn’t entail any revenue increase for the company, it’s just a shift of rates in various classes.”
When the rate increase was approved last year, Greeley Gas implemented a blanket increase for all accounts. Now, the company is proposing specific changes to each class.
If approved, residential rates for facility fees the cost of transportation and service would increase from $6.59 to $9.75 and the price of natural gas would decrease from $.16583 ccf (cost per cubic foot) to $.14060 ccf.
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“I don’t like it,” said Craig resident Harvey Craft. “It seems like since Greeley Gas got bought out by that Texas conglomerate, our gas rates have gone up and up. They double it then they cut it a quarter to make you feel good.”
On commercial accounts, the facility fee would increase from $17.07 to $18.75 and the cost of natural gas would decrease from $.18998 ccf to $.13398 ccf using the average usage, Greeley Gas estimates that will result in a savings of $10.20 per month.
“Anybody who’s willing to lower utility rates is absolutely the best person in the world,” said Marilyn McKinney, treasurer for the Copy Shop in Craig. “The fact they would lower the rates is a service to this economy when it’s hurting. Businesses are hurting right now because people are holding on to their wallets because of higher gas bills.”
According to Karen Wilkes, public relations director for Greeley Gas, the company makes no profit on the sale of natural gas or upstream costs the price of piping the gas to Greeley Gas. Those costs, she said, pass through directly to the consumer.
The load distribution charge and the facility charge are where Greeley Gas can make a profit, and a small one at that, she said. Greeley Gas is entitled to earn no more than an 11.25 percent profit “which we haven’t made in years,” Wilkes said. “But we needed to recover the cost of technological upgrades.”
The PUC governs utility prices, which can only increase with its approval.
According to Bote, the PUC will consider Greeley Gas’ proposal at its weekly meeting Wednesday and will likely suspend the rate increase and set it for a hearing. If the PUC doesn’t suspend the increase, it will go into effect Aug. 15, but that’s not likely Bote said.
“There’s always the possibility the committee would like at the proposal and say rates are reasonable and go through with it, but that’s not likely to happen,” he said.
One goal of the change, he said, would be to unify facility charges, which now vary from region to region. The northwest region, being the lowest in the state, will increase the most.
“We buy natural gas from different suppliers and different pipelines so that equals a change in the rate (by region), but facility charges should be the same across the state,” Wilkes said.
“This is just a proposal. It doesn’t even mean it will actually happen because we have to prove to the commission the way we figured it was right,” she said.
If approved, the facility charge will be a standard $9.75 per month for all residential customers in the state and $18.75 for all commercial accounts. That’s a decrease only in the northeast region.
“It’s good news or bad news depending on where you sit and which class you’re in,” Bote said.
“The commission will determine, based on what they hear in the case, what they think is just
Witnesses will testify at the hearing, he said, and representatives from the Colorado Office of Consumer Counseling will attend, representing the interests if individuals, small businesses and agriculture.
According to Wilkes, the last increase to the facility charge was in 1994, though natural gas prices have gone up and down. Residents say rates increase nearly 30 percent in 2000 and 50 percent in 1997. They went down slightly in 1998.
“I’m just concerned about the working poor,” said Community Budget Center board member Charlotte Craft. “They don’t get wage increases in line with utility increases.”
The Community Budget Center provides assistance to low-income people in paying their utility bills.
Craft said some people can’t make ends meet with prices they way they are now, let alone absorb another increase.
“I don’t want to see (Greeley Gas) operate at a loss. I’m not asking for that,” she said. “I’m asking for reasonable rates people