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PSNC Receives Approval to Amend Gas Rate Plan

Posted May 22, 2007

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— PSNC Energy has received approval from the North Carolina Utilities Commission to amend its controversial rate structure, which sets a minimum usage for gas customers in the summer months to prevent a higher rate in the winter.

The company is now allowed to move all of its standard rate customers to it lower value rate, which is approximately $1.18 per therm, effective June 1.

About 120,000 customers statewide -- considered "part-time" customers because they do not use as much natural gas in the summer -- on the standard rate plan pay $1.30 per therm. PSNC said part-time customers create inconsistency for the system and are more expensive to serve.

There are about 280,000 customers -- who use natural gas year-round -- on the value rate plan. Effective June 1, all 400,000 residential customers will pay the same rate.

15 Comments

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  • DeM May 23, 2007

    Lone Voice -
    While the concept of 'buying in bulk' for a discount may hold for free market retail establishments, it's not exactly fair with a monopoly/utility.

    Because of PSNC's favorable status, they were legally required to justify the change, and the argument was that those who used less than 24 therms during the summer were causing inconsistant peak usage. You didn't need to be truly a part-time gas user to get trapped by the higher rate.

    Using less than 24 therms put me in the high-rate category, although my H20 (used year round) and heat are both gas. I just conserve. That makes me **better**, not worse, at reducing the peaks and associated costs PSNC will incur during the winter.

    I think that if PSNC were truly concerned about reducing peak usage (their stated rational for the selective rate hike), they would offer DISCOUNTS, not MARK-UPS to those that conserve. But I suspect that they were simply trying be more profitable, and tailoring their argument to fit.

  • Amish May 23, 2007

    Now that PSNC has eliminated this rate schedule, someone should investigate how natural gas companies can sell fire place inserts that don't require insulation in the outer wall. We found this out when we moved into a new home in '95. When we were in our living room we felt a constant draft from the natural gas log unit. I called the installer and he said building codes don't require insulation.

    How can an industry sell units that don't require insulation in the outer wall? The gas companies should love these units as they not only use gas in fake logs, but the whole house requires more gas heat to overcome the draft from the uninsulated fire place unit.

    Luckily I was able to take off the exterior siding, cut into the sheathing and insulate this space. I'd like to see PSNC held responsible to advertising these fire place units - why not get them to do thermal imaging on homes and get them to pay for the fix to insulate the outer walls?

  • Stormy13 May 23, 2007

    After reading all the comments here I feel the need to add another one in addition to my original. I only use PSNC service for heating in the winter. I rent my home and that's how it is set-up. I do pay a bill EVERY month of the year which has an "administrative fee" and the therms it takes to keep my pilot light burning (which isn't much). How dare PSNC state that I am the reason for their charging me higher rates! That is just plain stupid on their part.

  • maryanpad May 23, 2007

    I'm one of the people whose rates doubled. I am still upset because I'm my only source of income and I have a very stringent budget. This huge increase made it very difficult financially for me. I keep my thermostat lowered to conserve energy and keep my utility bill as low as possible. I did not choose to have a gas furnace and water heater. If at some time in the future I can afford to rectify this, I will. Also, what about people on a fixed income who must choose between warmth, food or medicine? They are a segment of our population that are suffering the most because PSNC cannot seem to find a reasonable solution to their glutinous ways. Why not just increase everyone's bill a few dollars to compensate for any of their miscalculations? That would seem more fair than penalizing customers who can least afford such an outrageous increase.

    map1

  • uncalumni02 May 23, 2007

    I think it's ridiculous to make part-time users pay more, therefore, I am glad they are changing their policy. Customers shouldn't be punished for using less gas. My fireplace and water heater require gas. Obviously, I have no use for my fireplace other than winter.

  • cherokee43v6 May 23, 2007

    Except that in this case, the expense of 'Not Going' is on the order of thousands of dollars, if I were to decide to go 'all electric' and not use PSNC's service.

    Essentially, we are trapped by the configuration of the house. Either it is made to utilize gas appliances or it isn't. It's not like I CHOSE to not install a gas stove and water heater! I bought an existing house. It had a gas furnace and electric appliances.

    The company has folks like me over a barrel and is utilizing their monopoly on the service to gouge us because they know we can't afford to tell them where to take a flying leap!

  • Lone Voice in the Wilderness May 23, 2007

    Taxation is one thing. Cost of gas (or diesel) is another. I would have no problem if a gas station charged a different price on purchases of more than 45 gallons at a time vs. purchases of 44 gallons or less.

    Different price structures based on the amount purchased isn't unfair. It happens all the time. Why is it that some museums offer a group discount for groups of 10 or more? It's the same concept. Think of me as a group of 12, so I get a discounted price. Another group, say a group of 3, pays the full price.

    In the end, I'm still paying more out of my pocket. PSNC is just trying to reward me as being a loyal customer.

    Plus, it is a choice. I didn't have to buy my home in the downtown area that is primarily gas. Or, I could have converted my water heater, stove, and boiler to all electric. I could have had the gas service removed, and therefore not be a PSNC customer at all.

  • cherokee43v6 May 23, 2007

    Lone Voice... I'm sure you drive your car much less than a long-haul truck driver drives his truck... Do you believe it would be fair, because you use the roads less, for you to pay higher road taxes?

  • Lone Voice in the Wilderness May 23, 2007

    I'm a year-round gas user. My stove and water heater are both gas. To me, this rate seemed fair. I pay a gas bill year round. This money goes to help support the infrastructure, keeping the pipes and the utility around to support people who use it part time.

    No one complains when a grocery store offers a free turkey to customers who spend at least $50/week on groceries for the 6 weeks before Thanksgiving. Why are people who are single & spend less than $50/week on groceries NOT getting a free turkey?

    Maybe it's a bad comparison, but nonetheless, I think that the different rate structures are fair.

  • wab44579 May 23, 2007

    Ask Duck Cheney

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