The average residential customers of Peoples Natural Gas Co. will see their monthly bills rise $6.60 starting Wednesday as a result of higher commodity prices.
The rate per thousand cubic feet (mcf) of natural gas for residential customers will rise from the current $4.32 in effect since Oct. 1 to $5.11 on Wednesday, Joe Gregorini, Peoples Natural Gas vice president of rates and regulatory affairs, said.
That will take the average residential bill from $75 to $81.60.
The increase in the cost recovery rate - what Peoples expects to pay to buy the natural gas it supplies - is updated quarterly to reflect market conditions. Peoples and other gas companies do not make a profit on the cost recovery rate.
"The increase is the result of a slight uptick in natural gas prices purchased from the prior three months and what we are projecting for the current three months," Gregorini said. The quarterly changes essentially trues up customers' bills.
The cost recovery rate used to account for about three-quarters of a residential customer's monthly bill, but it's down to about half now because gas costs have fallen so much, Gregorini said.
The change in rates does not affect about 20 percent of Peoples residential customers who have chosen their own gas supplier.
Under deregulation, customers are permitted to choose a company to supply their natural gas and agree to a contracted rate, even though Peoples will continue to deliver it via the company's distribution lines.
For more information on finding suppliers, go to www.pagasswitch.com.