National Fuel Gas Corp., lowered its monthly natural gas rates
for residential customers, effective Wednesday.

Officials attribute the drop in price to a milder-than-normal
early portion of the winter. As it stands, a typical customer using
100,000 cubic feet of natural gas a year will see the price decline
from $120.05 to $113.49, or 5.74 percent.

Like other utilities, National Fuel can request a rate change
every quarter with the state Public Utility Commission.

National Fuel’s Senior Manager of Corporate Communications Nancy
Taylor said Wednesday that customers have received a decrease the
last four times the utility has changed its rates. There was no
rate change last May.

Taylor said a reduced demand for natural gas across the
northeast during the months of November, December and the first
half of January have led to lower commodity prices, which is passed
along to the customer.

“This is both a look back and forward,” Taylor said. “At this
point, we see this trend continuing. But, what happens when May
comes this year, we just don’t know.”

May is the next time National Fuel will be able to petition for
a rate adjustment.

“It really depends on the weather,” Taylor said, referring to
any possible increase in prices. “If we have a fairly normal rest
of winter, I would imagine the prices will stay where they
are.”

Ironically, the announcement of the rate decrease arrives during
the middle of a cold snap, during which the region has seen some of
its lowest temperatures to date.

Taylor said rates also decreased at this time last year.
Residents would have to go back to November of 2005 to find the
highest price over the past two years. The price adjustments are
different from a proposed surcharge from the utility last year
which called for an additional fee on customer bills if the average
consumption dropped.

Gas supply charges – which differ from a delivery service charge
which represents the utility’s cost of doing business – comprise as
much as 80 percent of a customer’s winter bill, according to
Taylor.

The lower rate can also be traced back to a stockpile of natural
gas nationwide, Taylor said, adding natural gas storage levels
currently stand at 20 percent above the five-year average.

“Despite recent colder temperatures and the resulting increasing
demand for natural gas, the surplus storage levels have kept prices
down and enable National Fuel to lower this component of customers’
bills to reflect more current market prices and the cost of gas
that has been, and will be, purchased by the company for its
customers,” Taylor said.

Meanwhile, Taylor said the utility recently forecast an increase
for purchased gas costs in its annual state-required filing with
the PUC, effective Aug. 1. That figure, however, will be updated to
reflect market activity since the document was submitted.

Taylor said National Fuel is required each Jan. 1 to forecast
what it believes gas prices will be. “Essentially, we are making an
18-month prediction on where things will go. We work off
marketplace numbers.”

The company’s “gas year” runs from Aug. 1 to July 31. When
National Fuel made its filing to the PUC, the figures were based on
last November’s numbers. “In anticipation of winter, they were made
higher than normal,” Taylor said.

“With any filing we make, we take into account if the cost of
gas changes in the meantime,” Taylor said. “The ultimate number
won’t be formulated until July.”

During that time, the PUC will look at National Fuel’s gas
purchasing practices and analyze the type of contracts it has.

Customers having trouble paying their bills are asked to contact
National Fuel at 1-800-365-3234 and inquire about payment options
or tips on how to conserve energy.

National Fuel serves approximately 214,000 customers in 14
counties in northwestern Pennsylvania, including McKean County.