WCBC

August 5th, 2019 by WCBC Radio

Following an initial review of the “Purchased Gas Adjustment” cases filed recently, the Public Service Commission of West Virginia is expecting slightly lower gas utility bills across the state for the upcoming heating season.

Natural gas utilities that serve over 91% of the natural gas customers in the state have filed requests with the Commission to lower the purchased gas portion of their rates.  Mountaineer Gas Company has asked for a decrease of 3.91% and Hope Gas/Dominion Energy has requested a decrease of 8.87%. 

Five companies, serving 8.5% of residential natural gas customers, have requested an increase in their purchased gas prices due to under-recovery of gas costs in 2018 and, in some cases, projected higher gas prices being charged by their suppliers.”

The Commission does not regulate the price of natural gas; that price is determined by competitive markets.  The Commission does examine the gas purchasing practices of gas utilities and ensures the utility satisfies its burden to show that dependable, lower-priced gas supplies are not readily available. 

By law, gas utilities are permitted to recover their costs to purchase natural gas. The gas rates of customers are adjusted annually to account for the cost of gas in a process called a Purchased Gas Adjustment (PGA) proceeding before the Commission. The PGA is an estimate of expected prices utilities will have to pay for gas from their suppliers for the period of November 1 through October 31 of the following year, as well as a “true up” of actual costs for the previous year. The PGA does not include any profit for the utility.