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Extended cold snap causes gas prices to rise for D.C. customers
Question of the Day
The price of natural gas through Washington Gas increased by nearly half from February to March, meaning consumers could see hefty bills this month if the region can’t shake off winter’s icy grip.
This month, the cost for a unit of natural gas, called a “therm,” increased from 65 cents per therm to 93 cents per therm. For a household that relies on the average winter usage of 200 therms a month to heat a home, the monthly bill would equal $290 — an increase of $56, according to the D.C. Public Service Commission.
“Outside economic factors, customer usage and unpredictable weather can have an impact on bills and the cost of natural gas during the winter,” Washington Gas spokesman Ruben Rodriguez said in an email.
Experts point to the extremely cold temperatures that spread across much of the country this winter as the likely culprit behind price increases.
“There’s been unprecedented demand in 2014 because of the cold, so I’m sure that is influencing general rising prices,” said Amy Sweeney, a natural gas specialist at the U.S. Energy Information Administration.
But because prices are set each month to protect consumers from the daily cost fluctuations of natural gas, the extreme demand from this winter is only now being reflected in the skyrocketing costs.
“January 2014 was the highest demand month for natural gas ever,” said Chris McGill, vice president of policy analysis for the American Gas Association. “Everything east of the Rocky Mountain region has been colder than usual this year.”
Washington Gas announced earlier this year that the company had broken its record on Jan. 7 for the most natural gas distributed to customers during a 24-hour period. The prior record was from January 16, 2009. That month, prices for natural gas reached $1.07 per therm, according to the Public Service Commission.
Utilities don’t reap any profit from the price increases, which are passed along to consumers as the cost of the commodity rises. Rather, utilities collect profits from the costs associated with the distribution of gas used.
Washington Gas customers saw an increase in distribution costs last year after the D.C. Public Service Commission approved an $8 million revenue increase, which raised the average residential customer’s bill by $3 a month.
Prior to the increase in prices this month, Mr. McGill said wholesale costs of natural gas have remained relatively stable. As consumption comes back in line with normal usage rates, the price is expected to stabilize once again.
But though spring — and its warmer temperatures — should be on the horizon, relief may not be immediately forthcoming. Outlook predictions from the National Weather Service predict below normal temperatures for the month of March.
To provide some relief to customers, who might not be able to keep up with the high gas costs, Washington Gas announced a new payment plan that allows for deferment of bills over $500.
“Active residential customers with gas bills currently up to $500 past due may request to have these amounts billed over a 6-month period,” Mr. Rodriguez wrote.
Customers may also be placed on budget plans, which allows them to spread the cost of winter heating over the entire year.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
Andrea Noble is a crime and public safety reporter for The Washington Times. She can be reached at email@example.com.
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