Arkansas Gas Utilities File Winter Rate Costs, Customers To See Winter Bills Fall By 20%

Customers of Arkansas’ three natural gas utilities will see winter bills that are more than 20% lower than last year as natural gas futures have fallen well below $2.40 per million British Thermal units (mmBTUs) ahead of this year’s heating season.

On Friday, CenterPoint Energy, Arkansas Oklahoma Gas Corp. and SourceGas all filed gas costs reports and rate schedules for this winter with the Arkansas Public Service Commission, according to John Bethel, executor director of the state regulatory agency.

“Each utility’s cost of gas adjustment represents a reduction from the currently effective rate and from the rate that was effective last winter,” Bethel said. “The rates will go into effect on Nov. 1 pursuant to the operation of each utility’s cost of gas adjustment tariff and will not require a Commission order.”

Houston-based CenterPoint Energy, the state’s largest gas utility, said its Arkansas customers will see lower gas bills for the second time this year because its cost of gas rate is 33% lower than last winter. That adjustment will lower a residential gas bill using 100 Ccf (hundred cubic feet) of natural gas by about 19% from a year ago, meaning a customer paying $109.12 last year will pay $88.09 in November, officials said.

“The price we pay to purchase natural gas for our customers’ use has continued to drop in the last several months and these affordable prices make natural gas a smart choice for the home, the budget and the environment,” said Walter Bryant, vice president of CenterPoint’s Arkansas gas operations. “This is great news for our customers as we go into the heating season and the upcoming holidays when families entertain and cook more in their natural-gas fueled kitchens. We’re happy to be passing another decrease in our natural gas supply costs on to them.”

CenterPoint, the state’s largest gas utility, has 430,000 residential, commercial and industrial customers across the state. In April, CenterPoint made an adjustment that lowered residential gas bills by more than 14% compared to last year. The Houston-based utility typically works with a variety of natural gas suppliers and buys natural gas throughout the year on a competitively bid basis.

“We are continuing to make significant investments, such as our ongoing pipeline replacement programs throughout Arkansas, to maintain the safety and reliability of our natural gas system and benefit our customers and communities,” Bryant said.

For SourceGas, the cost of gas rate will be approximately 40% lower than last winter’s rate. For a residential customer using 100 Ccf of gas, that person will see his monthly bill fall by nearly 23% compared to last winter, Bethel sad. In April, SourceGas requested a rate hike of $12.6 million from the PSC, which raised the average residential bill by $5. At the time, SourceGas officials said that rate adjustment was due to “significant investments” of more than $17 million to expand the utility’s 19-county system across northern Arkansas.

SourceGas’ utilities in Arkansas, Colorado, Wyoming and Nebraska serve more than 420,000. The natural gas utility operator, which has more than 150,000 customers across the northern part of the state, purchased the former Fayetteville-based Arkansas Western Gas in 2008.

For Fort Smith-based AOG, Bethel said the cost of gas rate this winter will be approximately 43% lower than year. For a residential customer using 100 Ccf of gas, a monthly bill will be about 21% lower than last winter for that level of usage. AOG serves 60,000 customers in western Arkansas and eastern Oklahoma.

AOG and SourceGas officials did not respond to phone calls or email queries from Talk Business & Politics concerning the lower winter rates in Arkansas.

The three Arkansas gas utilities join a host of other energy peers across the U.S. announcing lower gas bills for this winter. New Jersey Natural Gas notified regulators in that state Tuesday it will implement a bill credit of $76 million to residential and small commercial customers. That credit is expected to save the average customer nearly 28% on heating bills in that state.

On Oct. 22, Washington Gas Light Company, the regulated utility for the District of Columbia, Maryland and Virginia, said its 1.1 million customers could expect their upcoming winter heating bills to be 13-20% lower than last winter. SourceGas’ Colorado subsidiary also announced last week that its customers will see monthly gas bills that are 15-20% lower this heating season.

In Arkansas, state utility regulators do not hold hearings to approve seasonal rate changes, generally filed in the spring and fall. Winter rate adjustments, whether to lower or hike gas rates, run through the end of March.

Bethel said the gas rate charge includes the cost of the commodity and upstream pipeline charges, but does not add in any profit or return. Natural gas prices neared three year lows in trading this week on the New York Mercantile Exchange, closing Friday at $2.32 per MMBtu.