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Rate going up for natural gas customers


October 30, 2019

Natural gas customers in Washington will see higher energy bills beginning Nov. 1 due in part to last winter’s colder temperatures coupled with the 2018 gas pipeline explosion in British Columbia.

The Washington Utilities and Transportation Commission today approved rate adjustments ranging from 4-15 percent for Avista, Cascade Natural Gas, NW Natural, and Puget Sound Energy natural gas customers.

Higher customer costs for 2019 reflect wholesale natural gas price increases caused in part by the October 2018 Enbridge Pipeline rupture, which disrupted natural gas markets throughout the Pacific Northwest.

On Oct. 9, 2018, a 36-inch diameter natural gas mainline ruptured near Prince George, British Columbia. The Enbridge pipeline serves markets in Canada, Washington, Oregon, and Idaho with natural gas production from northeastern British Columbia through the Sumas hub, located on the border between Canada and Washington state. Imports of natural gas at the Sumas hub, which averaged 1.1 billion cubic feet per day in the first half of 2018, fell to zero for a day after the rupture. About half of Washington’s natural gas supplies come from the Canadian provinces of British Columbia and Alberta.

On Oct. 31, 2018, Enbridge announced that it had successfully completed repairs on the ruptured section of the pipeline, but capacity delays continued through the winter of 2019.

Natural gas companies are required to submit purchased gas cost adjustment (PGA) filings at least every 15 months to adjust rates based on the constantly changing cost of natural gas in the wholesale Market. The cost of gas purchases are passed on to customers; companies do not profit from or lose money on gas purchases.

The variation in total gas rates among Washington’s investor-owned utilities is due to regional differences in monthly residential usage, supply sources, conservation and energy efficiency programs, low-income program costs, and company gas purchasing practices.

Avista Corporation

The average bill for a typical Avista residential natural gas customer using 66 therms will increase by 14.8%, or $7.06 a month, for an average monthly bill of $54.85.

Rate changes for Avista primarily are due to the annual gas adjustment, but they also include an adjustment for the company’s revenue decoupling mechanism, a regulatory tool that allows utility revenues to be “decoupled” from sales. This ensures that a utility’s recovery of fixed costs does not depend on the volume of its energy sales, thereby removing a company’s financial disincentive to invest in conservation and energy efficiency.

Instead, revenue is determined on a per-customer basis and is adjusted annually to reflect actual expenses from the previous year.

Spokane-based Avista serves nearly 169,000 natural gas customers in eastern Washington.

Cascade Natural Gas

The typical Cascade residential customer using 55 therms a month will see an increase of 10.8%, or $5.17, for an average monthly bill of $53.23.

Rate changes for Cascade primarily are due to the PGA and decoupling mechanism, but they also include cost recovery for pipeline replacement, conservation programs, low-income assistance, and refunds related to excess deferred income taxes due to the Tax Cuts and Jobs Act.

Kennewick-based Cascade serves more than 220,000 residential and business customers in 68 communities throughout the state, including Aberdeen, Bellingham, Bremerton, Kennewick, Longview, Moses Lake, Mount Vernon, Sunnyside, Walla Walla, Wenatchee, and Yakima.

NW Natural

The typical NW Natural residential customer using 57 therms a month will see an increase of 4.4%, or about $2.14 a month, for an average monthly bill of $51.06.

Rate changes for NW Natural primarily are due to the PGA, but they also include annual adjustments for low-income assistance programs.

This increase is in addition to a separate rate case settlement for NW Natural, approved last week and also effective Nov. 1.

Portland-based NW Natural provides natural gas service to about 86,000 residential, commercial, and industrial customers in southwest Washington.

Puget Sound Energy

The typical PSE residential customer using 64 therms a month will see an increase of 14.1%, or $8.40, for an average monthly bill of $68.00.

Rate changes for PSE primarily are due to the PGA, but they also include cost recovery for pipeline replacement.

Bellevue-based PSE provides natural gas service to more than 800,000 customers in six Washington counties: King, Kittitas, Lewis, Pierce, Snohomish, and Thurston.

The UTC regulates the private, investor-owned natural gas utilities in Washington. It is the commission’s responsibility to ensure regulated companies provide safe and reliable service to customers at reasonable rates, while allowing them the opportunity to earn a fair profit.


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