City's gas rates still lower than state's average
By HAWKINS TEAGUE
Staff Writer
The Murray Natural Gas System expects rates this winter to average 12 percent higher than last year. City of Murray Administrator Matt Mattingly said this was the anticipated rate between November and March.
He said a typical customer who uses 10,000 cubic feet (10 mfc) of gas per month would likely pay $113.75 this year compared to $101.35 last year.
Don Leet, the city's former financial administrator and now a gas consultant with Murray Natural Gas System, said the city's supplier is the Tennergy Corporation in Jackson, Tenn., which purchases the gas on the open market, and is transported through two pipelines - Texas Gas Transmission and the ANR Pipeline Company. Leet said Tennergy has been the city's supplier for about 12 years and is currently in their second contract.
The expected average prices for Murray's 6,224 customers are lower than the expected state average of a 17 percent increase over last year, according to a press release from the Kentucky Public Service Commission. That rate is also in line with national averages.
While energy prices have been falling in the last few months and natural gas is much lower than its peak over the summer, about half of the gas used in winter is bought and stored in the summer, the release said.
Leet said a hedge program serves to lock in the winter prices in advance so they don't spike suddenly. He said about 75 percent is usually purchased before the winter.
Leet said he wasn't sure why the rise in expected rates this winter is lower than the average rise in Kentucky, but said it might be because Murray purchased gas on and off during the summer, but also in the fall after the price had dropped.
Despite predictions about rates, Leet said the biggest cost factor is how cold it will be. He said many customers don't understand how big an impact this has on what they pay each month.
He said anyone with questions about a bill could contact Customer Service Representative Rose Wilson at 762-0300.
Mattingly said Murray's price in October had been $11.50 per mfc and that it would remain the same in November. In comparison, Kentucky's five major natural gas distribution companies expect their wholesale cost in November to be $11.70 per mcf, according to the PSC release. This is an increase of $2.24 from the average of $9.46 per mfc - 24 percent - over last year.
The cost has, however, gone down considerably from August 2008's average of $15.17. In the last three months, the wholesale cost has gone down $3.47 (23 percent).
The five major natural gas distribution companies in Kentucky are Atmos Energy, Columbia Gas of Kentucky Inc., Delta Natural Gas Co. Inc., Louisville Gas and Electric Co. and Duke Energy Kentucky Inc. They serve a total of more than 750,000 customers in the state and deliver about 176 billion cubic feet of gas a year.
About 44 percent of Kentuckians heat their homes with natural gas. The 10 percent who heat with propane and 3 percent who heat their homes with fuel oil will pay more. The 39 percent who heat their homes with electricity should see the smallest increase.
Story created Nov 04, 2008 - 11:22:24 EST.
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