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Peoples Gas seeking rate decrease, cites Marcellus shale supply

Brian C. Rittmeyer
| Thursday, April 12, 2018, 3:06 p.m.
A Marcellus Shale well pad.
A Marcellus Shale well pad.

Peoples Gas is asking state regulators for permission to lower its rates.

According to a notice sent to customers, the company asked the state Public Utility Commission for an overall $3.2 million rate decrease.

If approved, the bill for a residential customer using 83 metered cubic feet (Mcf) of natural gas per year would decrease by 3.6 percent, from $94.99 to $91.60 per month.

The bill for a small commercial or industrial customer using 219 Mcf per year would go down by 4.4 percent, from $202.59 to $193.70. For a medium-to-large commercial or industrial customer using 3,166 Mcf, the monthly bill would go down by 4.9 percent, from $2,553.02 to $2,427.57.

If approved, the changes would take effect Oct. 1.

Peoples has about 700,000 customers in 18 Pennsylvania counties, including all of Southwestern Pennsylvania.

Peoples spokesman Barry Kukovich said it's happening because the supply of natural gas is much greater than the demand.

“We have an abundance of gas in Western Pennsylvania and West Virginia because of Marcellus shale,” he said. That refers to natural gas that's extracted from shale about a mile below the surface in a process called hydraulic fracturing, or fracking.

PUC spokesman David Hixson said the company could be making the request for one of two reasons — it charged customers too much from October 2016 to September 2017, or it could be anticipating paying less for gas in the future than it's charging now.

“Companies have the obligation to purchase the gas at the least cost,” Hixson said. “Any savings that they can achieve with purchased gas costs is passed on to the customers. Conversely, if the company's purchased gas costs increase, then customer rates can increase.”

Regulations allow companies to make quarterly adjustments on purchased gas costs, which can be made during the course of the year by notifying the commission. No formal commission action is needed for quarterly adjustments, Hixson said.

Brian C. Rittmeyer is a Tribune-Review staff writer. Reach him at 724-226-4701, brittmeyer@tribweb.com or on Twitter @BCRittmeyer.

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