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GUC To Decrease Natural Gas Rates

Greenville Utilities has reduced natural gas rates for its customers, effective March 1.

As a result, the average wintertime residential user of 75 ccf would see a decrease of approximately $10.50 per month. Depending upon the amount of gas used, residential customers will see a decrease of approximately 9%.

Natural gas prices have continued to decline during February as the market is pressured by concerns over decreasing industrial demand due to the economic downturn, along with ample nationwide natural gas inventories in underground storage.  As a result, the market price of natural gas has decreased significantly, and GUC is passing those projected savings onto our customers.

This will be the fourth natural gas rate decrease that GUC has passed on to customers in recent months. In addition to the current 9% decrease, we decreased residential gas rates approximately 5.5% in January 2009, 6% in October 2008, and 16% in August 2008, for a total decrease of about 36% or $13.82/month based on average residential usage.

Background:
GUC purchases natural gas through marketers on the open market. In addition to paying for the cost of the gas itself, we also pay to have it transported from the Gulf of Mexico to our system. A competitive market determines the price of natural gas, which is a commodity traded on the open market like wheat, oil, lumber and orange juice. The market price of natural gas is dictated by supply and demand. When demand is high, the price rises. When supply is high, the price drops.

Natural gas rates are set using a base rate that accounts for transportation and utility costs, then adjusted each month based on the fluctuating price of the gas itself.

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, we simply “track” the increases or decreases to our customers.