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Gas Prices Spark Action

Fortnightly Magazine - September 15 1997

Unexpected price increases for natural gas during the past winter heating season have stimulated action by state regulators across the country. Most recently, North Carolina and New Mexico have approved changes in adjustment clause and billing rules to temper the effect on consumers.

North Carolina. The North Carolina Utilities Commission opened a generic proceeding to consider shortening the notice period required for changes to benchmark natural gas commodity rates by local distribution companies. The commission noted that the volatility of gas prices had become a "very real concern" during the past winter heating season.

The commission opened the investigation in response to a request by North Carolina Natural Gas Corp. The utility recommended shortening the price change notice requirement from the current 14-day period to one day. The company had argued that the current rules require that notice be given at least five to 10 days before the "bid week" for purchasing gas had concluded. With a one-day notice period, benchmark changes could be filed immediately after concluding gas purchasing for the upcoming month. With an early filing, rates would more closely match the expected weighted average cost of gas, the LDC said. Re North Carolina Natural Gas Corp., Docket No. G-21, Sub 355, June 13, 1997 (N.C.U.C.).

New Mexico. The New Mexico Public Utility Commission has permitted PNM Gas Services, a division of Public Service Company of New Mexico, to waive its established billing regulations. The waiver should produce more accurate budget billing forecasts for its customers. PNM claimed that gas prices had "spiked" to unprecedented levels because of cold weather throughout the nation and higher-than-normal consumption in late 1996 and early 1997.

The budget billing variance was required so that the company could use projected gas prices rather than historic ones in setting customer budget payment plans for the coming year. Use of historical figures as required under existing rules would yield monthly gas bills for payment plan customers that were higher than are necessary to cover its estimate of gas costs, the LDC said. Re PNM Gas Services, a div. of Public Service Co. of New Mexico, Case No. 2774, June 27, 1997 (N.M.P.U.C.).

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