National Fuel Gas Distribution Corporation (National Fuel) has submitted to the Pennsylvania Public Utility Commission its adjustment to gas supply charges. This adjustment from May 1, 2016, rates increases the monthly bill of a typical residential customer using 97,100 cubic feet of gas annually by $20.82 from $50.89 to $71.71. This 40.9 percent increase is effective Aug. 1, 2016. The next opportunity to adjust gas supply charges will be Nov. 1, 2016.
The main driver of the increase is projected higher natural gas supply charges. Prices experienced over the last six months were extremely low due to the abnormally warm weather experienced this past winter. Market prices of natural gas continue to remain low when compared to the previous 10 years due in large part to the large supply of Marcellus Shale gas. Nearly all of the gas consumed by National Fuel utility customers comes from Northeast-produced shale gas. When comparing rates to recent years, this is an increase of 15 percent over Aug. 1, 2015, and a 12 percent decrease over Aug. 2014 rates. Within the past 5 years, rates have decreased overall by 24 percent.
National Fuel's price-to-compare gas commodity charge also will increase to $0.43550 per ccf. This reference point, detailed on the National Fuel bill under Gas Supply Charges, is important for customers who are shopping for an alternate gas supplier.
Gas supply charges are passed along to customers dollar for dollar, with no mark-up or profit to National Fuel. Pennsylvania utility companies are permitted to update gas supply charges on a quarterly basis to reflect changes in the market price of natural gas.