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GUC Successful in Deferring Natural Gas Rate Increase Until February
February 1, 2010 

Greenville Utilities purchases natural gas for its customers to use, and the market price of natural gas has increased significantly in recent months. As a result, GUC has passed through a natural gas rate increase to customers, effective February 1, 2010. 

A residential natural gas customer using 75 ccf (hundred cubic feet) will see an average increase of 4%, or $4.14/month on their GUC bill. 

"The commodity price of the natural gas we purchase has been rising since September 2009, and because of the recent extended cold snap, we saw a dramatic 19% increase in our costs in January,” said Anthony Miller, GUC’s Director of Gas Systems. “We have been able to defer passing any increases on to our customers until February because of our successful natural gas purchasing program, along with a number of operational efficiencies. Gas purchasing is an important aspect of our efforts to reduce costs. Our purchasing policy allows for longer-term planning, with purchases being made several months into the future when prices are favorable. This purchasing strategy allows Greenville Utilities the best opportunity to offer our customers price stability and protection from the ups and downs of the market.” 

“This increase is necessary to recover our increased costs,” said Miller, GUC’s Director of Gas Systems. “GUC purchases natural gas on the open market. Market prices go up/down depending upon supply and demand and other factors, and our natural gas rates are adjusted based on the fluctuating price of the gas. GUC does not profit from fluctuations in gas costs. All costs associated with increases or decreases in the commodity price of natural gas are normally passed along to customers on a dollar-for-dollar basis. In other words, periodically we “track” the increases or decreases to our customers. From August 2008 through August 2009, market prices went down and GUC decreased natural gas rates six times for a total reduction of 44%, or $38.04/month based on average residential usage.

GUC’s last natural gas rate increase was approximately 6% or $6.40 per 50 ccf usage in June 2008.

“It should be noted that the price of the gas itself is just one part of our overall costs to supply our customers with safe, efficient, reliable natural gas service,” said Miller. “In this case, our increased cost of gas equates to a 4% increase for customers.” 

“Market prices are beyond our control,” said Miller. “Any significant change in supply or demand -- such as a storm that disrupts production, or cold weather that increases home consumption - affects the market price of natural gas.  

There’s no question; it’s been cold lately. Forecasters report the longest stretch of cold weather in over 30 years settled into North Carolina in December and January. In December, there were 17 nights below freezing, and in January we had 15 consecutive sub-freezing nights. From December 16th through January 16^th, twenty-nine of thirty-two days had low temperature below freezing. The National Weather Service says that a cold snap of this duration was last seen in January 1977. 

Long-range weather reports continue to predict colder-than-normal weather for the remaining winter months.  

“As a public gas system, we are mindful of our obligation to our customers and community, and we are committed to managing gas costs so that we may offer the most economical natural gas rate possible,” said Miller.