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By JERRY LYNOTT jlynott@leader.net
Monday, March 03, 2003 Page: 1C
EDITOR’S NOTE: This is the second in a monthly series examining utility
bills and assisting consumers in understanding their monthly statements.
WILKES-BARRE – If the snow and cold aren’t enough proof of how tough this
winter has been, check your gas bill.
It’s probably costing a hefty sum for heat and hot water. And maybe it’s
forcing customers to look a little closer at the charges.
How many customers know the cost of natural gas varies with the amount
used? How much in state taxes is included each month? What does it cost to
pipe the gas to a utility company like PG Energy?
Like any public utility providing metered service, PG Energy is required by
state law to tell the customer more than just the total due for each month or
billing period.
How the utility arrives at the total must be explained in the bill. The
beginning and ending dates of the billing period must be indicated, as should
the meter readings on those dates. If they are estimated, the billing
statement should say so.
Take, for example, a customer who over a 31-day period used 221 CCF of
natural gas. CCF is the standard unit of one hundred cubic feet PG Energy uses
to measure consumption. The amount is calculated from the meter readings of
8875 ccf on Jan. 3 and 8654 ccf on Dec. 3, 2002.
Because PG Energy is not a producer, it must purchase gas from a supplier.
Donna Gillis, spokeswoman for PG Energy, said the gas is transported from the
Southwestern part of the country.
The commodity cost for the billing period was nearly 56 cents per ccf. But
precision matters to the customer and company, so the exact cost of $0.55781
was listed. Multiply that number by the amount of ccfs consumed and you have
the commodity charge of $123.28.
Maintaining PG Energy’s gas lines and paying the employees who read the
meters and make the repairs are company expenses passed on to the customers.
Add $11.25 to the total.
Piping the gas through the lines is another cost. Actually it’s based on a
step rate – one cost for the first 80 ccf and another cost for anything over
80 ccf, Gillis said.
Of the 221 ccf, the first 80 carries a rate of $0.24604. The other 141
costs $0.22319, more than 2 cents per ccf cheaper.
“The distribution charge covers all expenses and costs to transport
natural gas through our distribution system to our customers and includes
state taxes paid by the company,” said Gillis. “And, yes, this is the charge
from which profits may be derived.”
To allow for the difference between what PG Energy projects its gas supply
costs and the actual cost, a Gas Cost Adjustment Charge is included in the
bill. The cost reconciles “any over or under collections of gas costs,” said
Gillis.
The customer using 221 ccf was charged $0.020110 for the month, adding
$4.44 to the bill.
The amount of gas distributed depends upon the weather. In warmer months,
less is going to be used, Gillis explained. “In July we might distribute
16,000 (mcf or thousand cubic feet) a day in sharp contrast to January.”
On Jan. 23, PG Energy distributed a record amount of 338,872 mcf units,
said Gillis.
Sometimes, the adjustment charge results in a reduction.
When the base rate for natural gas changes, the taxes PG Energy pays – like
the state Capital Stock/Franchise Tax, the Public Utility Realty Tax and the
Corporate Net Income Tax – are affected. A reduction is reflected in the State
Tax Adjustment Surcharge as a credit to the customer’s account. Usually it’s
only pennies taken off a bill.
Jerry Lynott, a Times Leader staff writer, may be reached at 829-7237.