Utilities seek big gas rate increases

By NICHOLAS K. GERANIOS The Associated Press 12/9/00 2:25 AM

SPOKANE (AP) -- The rising cost of natural gas has prompted three utilities to ask state regulators for big rate increases. The increases are likely to be granted by the state Utilities and Transportation Commission.

Avista Utilities sought a 29 percent rate increase for 178,000 customers in Eastern Washington and northern Idaho.

Cascade Natural Gas, which serves 185,000 customers around the state, is seeking a rate increase of 26 percent, spokesman Frank Mansell said Friday.

Puget Sound Energy sought a 26 percent rate hike, according to spokeswoman Dorothy Bracken.

Catherine Parochetti of Avista Corp. in Spokane said it is a coincidence that the rate increase request came on the eve of a predicted cold wave.

"It's not related to that at all," she said Friday.

But the cold wave is likely to place additional strain on energy supplies, raising prices even higher.

Wholesale natural gas prices have more than doubled in the past four months, as demand in the region outstrips the supply. The rate increases simply add the higher gas costs to rates, and do not produce any higher profits for the companies.

All three companies already have raised rates twice in the past year because of the price increases, commission spokeswoman Marilyn Meehan said.

The three-member commission will review the requests on Jan. 11. Meehan said the commission is likely to grant the increases, which would take effect immediately.

Avista's request would produce an increase of $33.9 million from its Washington customers.

In Washington, a residential or small commercial customer using an average of 80 therms of natural gas per month would see an increase of $14.95 per month.

The average Puget Sound Energy residential customer, for example, will see his monthly bill increase from $64 to $80, Bracken said.

Natural gas commodity prices have risen to their highest levels in more than a decade.

"Natural gas is traded on the open market. And like any commodity its trading price can change dramatically based on supply and demand," said Scott Morris, president of Avista Utilities. "We'll continue to see higher prices until supply catches up with demand."

Development of new natural gas supplies has picked up in recent months.

Mansell said the number of gas drilling rigs in the field has doubled this year.

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-- Martin Thompson (mthom1927@aol.com), December 09, 2000