Increase to Natural Gas PGA
Posted on 01/08/2018
Rocky Mount Public Utilities (RMPU) customers will see an increase to the cost of natural gas service this winter due to the extremely cold temperatures that have affected much of the United States.
“When outside temperatures are this cold for this long, it causes a significant increase in the demand for natural gas to heat homes and businesses and to generate electricity,” says Rich Worsinger, director of Energy Resources. “This higher demand for gas has drastically increased the cost of pipeline capacity to transport the gas from the wellhead to the end users, including the city of Rocky Mount.”
Due to the higher pipeline capacity cost, RMPU must increase the Purchased Gas Adjustment (PGA) from $0.00 to $0.30 per therm beginning Monday, Jan. 8, 2018. This yields a residential gas rate of $1.41646/therm for the first 10 therms and $1.15183/therm for over 10 therms. The increase to the PGA means the cost of using 100 therms for a residential customer in January will increase from $121.83 to $151.83. The PGA increase will remain in place throughout the winter months.
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Purchased Gas Adjustment: Natural Gas is a commodity traded on the open market and its price is based on supply and demand. In addition to buying natural gas on the open market, the city of Rocky Mount also pays to have it transported from the wellhead to the city. Rates are set using a base rate that accounts for transportation, commodity and utility costs. Based on the fluctuating price of the delivered natural gas, the city’s rates may be adjusted each month using a rate mechanism called the Purchase Gas Adjustment (PGA). The city of Rocky Mount does not profit from the fluctuations in gas costs. Instead, all costs associated with increases or decreases in the commodity price of natural gas are passed along to customers.