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Natural Gas Prices to Increase

Posted June 27, 2007

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— Natural gas prices for PSNC Energy customers will go up next month, officials said Wednesday.

The North Carolina Utilities Commission approved PSNC Energy’s request to increase the purchased gas component of its rates. The approval will mean an increase of about 11 percent for residential customers, taking the residential rate from $1.18 to $1.31 per therm.

PSNC Energy officials said the utility hasn't raised its “cost of gas” since November 2005 and had cut that component of its charges in January. Rising wholesale prices for natural gas have resulted in the company’s need to adjust its rates, the company said.

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  • SaveEnergyMan Jun 27, 2007

    Large users (plants) can buy on the market. They pay the local gas company to transport the gas through their lines. They are the only one's that have a deregulated market around here.

    Gas prices rose on increased demand. Gas companies have to buy on the market too, usually for some fixed period. They sometimes get good deals and get caught in bad decisions. In general the rise in rates is related to their cost increases.

    Power companies started installing gas turbine generators for peak power generation. They are quite expensive to operate and greeatly increased the demand for gas. They did this because they couldn't build nuclear for fed regulations, coal for the emissions, or oil for the price.

    I think the WRAL story said they're raising the rates for year-round customers to the same as the seasonal customers. People were complaining about the difference in costs and you see what that got them!

  • Chupacabra Jun 27, 2007

    "Can someone explain the real reasons that natural gas prices are not nearly as reasonable as they once were..."

    Here is an attempt at a simplistic explanation. And, it is Bush's fault, but I believe we can blame this one on the elder Bush. Back in the early 90s the decision was made to loosen restrictions on the use of natural gas beyond home heating. As a result, electric utilities began to build lots of gas-fired power plants all over the country, especially in the Southeast. It takes a HUGE amount of natural gas to run a power plant, and since these plants run year around, the demand has increased year-round as well. So, you can blame much of your gas price volatility on Bush and your local electric utility.

  • andrewsnc5 Jun 27, 2007

    Don't know the pros and cons of a de-regulated natural gas market, but there are other states that allow competition (and thus market fluctuations in price). I know Georgia is one of those states. PSNC's sister company, SCANA Energy is a competitor to one of the incumbant utilities, Atlanta Gas & Light. There are other competitors as well. Wish we could at least look to see if consumers ultimately win out in this type of environment?

  • jasonicholas Jun 27, 2007

    Good question... Like any monopoly, we have to pay what they tell us; sure it has to do with less profits in the summer.

  • bmullins Jun 27, 2007

    Actually PSNC raises prices slightly in summer due to decreased usage. As natural gas is primarily a seasonal commodity, they spike prices in the summer and lower them in the winter to help offset their operating costs (this is coming from a PSNC usage statement/bill).

    The 11% is an overall raise in cost it appears and will still be subject to the seasonal fluctuations.

    Of course, I could be completely wrong.. but I got the first paragraph directly from a PSNC letterhead. I'll see if I can find the actual document.

  • ladyblue Jun 27, 2007

    The only answer I have is they will say expense costs. I call it price gouging.

  • casp3r Jun 27, 2007

    Its bush's and Iraq's fault. lol Just kidding. I just dont understand how companies are aloud to raise prices for gas , electric, cable or whatever to 11% all at once. Heck Id like an 11% raise this year wouldnt you all?

  • andrewsnc5 Jun 27, 2007

    I thought that since consumption was less in the summer (warmer) months, demand is less, and thus prices would be decreasing instead of increasing. This story says that rates will increase by 11%. Reasonably priced, plentiful, reliable natural gas is no longer a sure thing. Can someone explain the real reasons that natural gas prices are not nearly as reasonable as they once were...particularly in a relatively mild climate like ours?