The last increase in the non-gas base rates for the Western Slope service area, which covers items such as infrastructure, equipment, labor, materials, billing, and safety services, was in 1994.
“We have been able to maintain the distribution rates for our customers for many years and make service improvements by effectively managing the business and our costs,” said Dan Watson, president and CEO of SourceGas. Watson added that the improvements made to the system, which include the implementation of a mobile dispatch system, automated meter reading and a centralized call center, have helped keep costs in check for customers. “A thorough analysis, however, has demonstrated that we cannot continue to absorb these higher costs and must adjust our rates in order to keep pace.”
The non-gas component of a monthly bill includes a fixed customer monthly charge and a volumetric charge, which varies from month-to-month depending on the amount of gas used. SourceGas proposed a higher fixed monthly customer charge and a higher volumetric charge. The request does not affect the largest portion of a customer’s bill, the natural gas commodity costs, which are based on market prices and currently account for 70 to 80 percent of the total monthly bill.
A typical residential customer who currently uses 1,310 CCFs annually will see an increase in their average monthly bill of approximately $17.79, or 19.5 percent, while a typical commercial customer using 4,626 CCFs annually will see an increase in their average monthly bill of approximately $25.91, or 8.61 percent.
Watson explained, “Shifting these non-gas costs away from the portion of the bill that is subject to fluctuations will help stabilize customer bills, reduce the impact of winter heating bills by spreading more of our cost recovery over a full year and lessen the impact of the volatile commodity prices we’ve seen recently.” Watson added that SourceGas has the opportunity to earn a rate of return that is established and monitored by the CPUC as compensation for its investment in the pipelines and infrastructure that deliver natural gas safely, reliably and efficiently.
The company proposed that the filed rates become effective April 4. However, this request is subject to suspension by the Colorado Public Utilities Commission while the filing is being reviewed.
Additional information is available online at www.sourcegas.com/CO.aspx.