MOBILE
Avista bills could reflect falling gas prices
February 13, 2012 2:05 p.m. - Updated: 2:17 p.m.
Falling wholesale prices for natural gas could soon be reflected in utility customers’ bills, Avista officials said today.
The Spokane-based utility has asked Washington and Idaho regulators for permission to pass lower gas prices onto customers, effective March 1.
If approved, a typical residential customer in Washington would see a 6 percent decrease on their monthly gas bill. The savings would amount to about $3.90 per month, for a total bill of $60.73.
In Idaho, a typical residential customer would see a 5.7 percent decrease. The savings would amount to $3.46 per month, for a total bill of $57.50.
A typical residential customer in Washington uses 67 therms of natural gas per month. In Idaho, the monthly average is 62 therms.
Avista’s commercial customers in Washington and Idaho would also see a savings in the 7 to 10 percent range, officials said.
An increase in natural gas supply, along with weak demand, has led to falling prices, said Dennis Vermillion, president of Avista Utilities. He said the utility wanted to pass the lower prices onto customers sooner than the fall, when adjustments for wholesale gas price fluctuations are typically made.
The wholesale cost of natural gas makes up about 65 percent of an Avista customer’s gas bill. The remaining 35 percent covers the cost of delivering the gas to clients, including equipment and employee costs.
HAHAHAHA!
I won’t be holding my breath waiting for my $1.20 a month rate decrease while they are passing yet another 10% increase in overall rates to reflect the need to repair their “infrastructure” yet again…
Abolish the monopoly on power utilities in this state and do it soon!
No kidding valleyman!! Especially since in 12/2011 they had been approved to INCREASE the rates by 2.4 % for gas customers. It was increased 4.6% for electric customers as well. Gee, such a decrease. I hope the Billions in the profit margins won’t suffer too greatly. It would be such a shame if they had another record breaking year for the owners…….
What does Avista charge for one therm of gas?
Well, they do buy and trade on the futures market, so I guess the future is now. Interesting side note — much of the fracking for nat-gas is done to add to the various energy companies’ reserves and increasing a company’s reserves in turn boosts the executives’ compensation. There’s talk of a nat-gas bubble and the thinking is that many of these nat-gas reserves are smaller than reported or won’t prove-out. The extraction industry is so…interesting.
Westerly, currently in Washington a therm is at $.87508. Multiply that number by your therm usage, then add the basic charge of $6 for your total. For example (.87508 x 6) + 6 = $64.63. The rate decrease would cut roughly $3.90 from that average example.
In Idaho a therm is $.91464. Multiply that number by your therm usage, then add the basic charge of $4.25.
Couple things. Its important to note that the actual cost of gas is a pass through from Avista to customers. We don’t/can’t mark up the cost of gas, so Zelda’s comments about natural gas reserves and compensation is off the mark, at least regarding Avista employees. I can’t speak for any other company. The actual cost of gas makes up about 65% of your bill, while the other 35% goes delivering the gas.
I’d be happy to answer your questions at conversation@avistautilities.com or on the Avista FB page: www.facebook.com/avistautilities
-Dan
$0.91./therm on my last bill, westerly.
Frack, baby, frack!
my current bill says first 23 therms is .87508 over 23 therms is .84889
Dan — I wasn’t talking about Avista; that’s why I said it was a “side note.” Avista buys its nat-gas, it doesn’t produce it. I was commenting about the vagaries and speculation in commodity futures as it applies to natural gas extraction companies.
Who does Avista buy their natgas from? An affiliated company?
The US is drowning in natgas - so much so that the oil wells in North Dakota are not even capturing the gas - they just flare it.
As long as Avista is a private, for-profit corporation (regulated, sort of, although the regulators seem to give Avista most of what it requests), the prices will continue to increase to pay dividends to stock holders and other investors, to fund large bonuses for management, and to provide hefty pay increases for workers.
And if you wonder why your cable TV bill is so high, and keeps climbing, I have the answer. Once cable was federally regulated and rates were very low. To provide “competition” the regs were removed. Now a cable company can charge whatever it wants (my source is the individual in Spokane who is supposed to “regulate” Comcast—I was told that the city is powerless to stop or even approve any rate increase).
Airlines used to be regulated. People enjoyed flying and airlines made money. The regs were removed. People no longer enjoy flying, and airlines can’t seem to make a profit.
The financial industry had been was subject to stiff controls since the Great Depression. Those were removed, and we got the Great Recession.
Anyone for privatizing Social Security and Medicare??
Welcome back Dan :^) Try as you may, putting lipstick on your prize pig does little to hide it’s corporate appetite. You and your greedy friends at the top have done enough damage to our families and our local economy. One look no further than the January bill you sent us. I guess we will not be enjoying anything new around our homes this year again.The only thing new we got last year was a box of lightbulbs. When is enough enough Dan ? I am thoroughly disappointed with you and the leaders at AVISTA. AVISTA is in a wonderful financial position to help it’s customers and Spokane as a whole. Instead you choose to keep extracting the last lifeblood from our community.
Your meager proposed rebate should never have been needed. The last two increases should never have been granted. The last time AVISTA lowered gas rates.You requested an increase the next day. I suspect you will be filing with the good ole boys at the UTC tomorrow. :^(
WHAT A GREAT COMPANY and NEIGHBOR !
Dan — above you state that (.87508 x 6) + 6 = $64.63. Is that the new math? Please ensure that this computational method is reflected in the invoices you send out as that would dramatically lower our bills. (.87508 x 6) + 6 = $11.25 (rounded to the nearest penny), not $64.63.
I’m with you more or less, lowtech, except for the airlines. What you’re forgetting is that when airlines were regulated, tickets were WAY more expensive. The only way they could compete, if they could compete at all since they all had monopolies on certain routes, was by offering better food, sexier stewardesses, etc. Essentially, what the government did was say, “We are not going to allow anyone to sell a low-priced product in this market.” Once regulation was removed, consumers could have chosen to pay pre-deregulation prices to get a high quality product but they didn’t. All they wanted was the cheapest way to get from A to B and if that meant riding in a cross between a tin can and a cattle car, so be it. The fact that the airlines aren’t making a profit doesn’t really concern me. I’m not sure why it concerns you either, since your main argument against privatization is that the private companies make too much profit.
Do you really think that it’s better for society if the government sets a lower limit on prices of anything? Suppose they said wine must be no less than $30 a bottle. Obviously those who could still afford to drink wine would only drink better-quality wine. Maybe later, after de-regulation, drinkers of two-buck-Chuck would reminisce about how much better the wine was when it was regulated, having forgotten how much it cost. That’s what you’re doing with airlines.
The only place for government price regulation is when a product is both necessary and it’s impractical to have true competition. Public utilities are the main example. It makes no sense to run multiple sets of wires and pipes to every neighborhood. The overhead involved would make even the “competing” services too expensive. So, tightly-regulated monopolies make sense there. I’m a big fan of public utility districts, myself. From what I’ve seen they provide service that’s every bit as good as any private utility, at considerably less cost.
When it comes to cable TV, we’re starting to drift away from the criteria for regulated monopoly, though. For one thing, the service is far from “necessary”. A case could be made that Internet is as necessary as a telephone these days, but TV is purely entertainment. Also, although there is only one monopolistic cable TV supplier, there is competition from both satellite TV and the traditional telecoms that are moving into broadband entertainment. This is different from electricity, gas, or water, where there really isn’t any competing product that performs the same function at a comparable cost.
As for privatizing social security and medicare, most of the proponents of that got real quiet as soon as the stock market went in the toilet. Indeed, the only people now who seem to be in favor of it, and we rarely even hear from them, are brokerage houses.
Good point, PROF.
To make any sense out of this, a history of rate changes would need to be supplied.
Also, wondering if 65-35 ratio has changed much over the years.
Year over year spot prices have dropped a hell of lot more than a paltry 6%, from $4.50 per MMBtu to $2.50.
Good info here:
http://205.254.135.7/naturalgas/weekly/#jm-overview
Dan, why does Avista charge 4% more for gas in Idaho than in Washington? Presumably it comes from the same sources and the average cost of delivery is comparable. I really would like to know.
how generous, prices drop 25 per cent, they give us 25 per cent of the decrease!!
RedCedar wrote,
“As for privatizing social security and medicare, most of the proponents of that got real quiet as soon as the stock market went in the toilet.”
Only the short-term thinkers. You need to consider instead the prospects of growth over the life of the investment, beginning, say, at age 18 when you start working to age 67 when you retire.
Yes, I admit to being a short-term thinker at times. As Keynes put it in 1923, “In the long run, we’re all dead”.
If everyone would invest in nice safe stocks starting at age 18, and if over the course of their lives, there was no major disruption to the economic order of things, then we would need no taxpayer-funded or employer-funded old age pensions. As a pension system for society as a whole, it’s safer to tax those who are currently working in order to pay pensions to those who are retired, than to rely upon “investments” of any sort. Many people do well with their investments. Some do not. Many mistake luck for skill. I would not like to see the unlucky or the unskillful live out their last years in abject poverty.
That’s what I get for trying to do a math example. Not really in my wheelhouse! Sorry, the 6 in that equation should have been 67 (the average therm use in Wash.) Never fear, I’m not the one over here calculating your bills.
RedCedar,
As for the difference in the therm price by state. I’d point to the different regulations or direction by state commissions that vary and a lot of it is based on timing of when a new rate goes into effect. THe price is a moving target all the time and when we look next year both rates will likely be different to reflect the past price set by the comission. We purchase gas before you use it, while you use it and into the future assuming you will use it - and the price has to be a pass through (accurate) even though we can only go in for a price adjustment once or twice a year. Like I said, its a moving target, just like the price of gas at your local gas station.
Another point about prices. This PGA is all about the actual cost of gas, not the aging delivery system that gets it to you. We are obligated - as we should be - to get you energy in a safe and reliable manner. So, to address the above comments about rising prices, this PGA decrease doesn’t mean their won’t be a request for higher rates into the future. The need for that is still great.
-Dan