Dominion Hope customers will be paying more for their heating bills this winter even though the price of natural gas has been dropping since December and even though the state Public Service Commission has denied a rate increase that would have gone into effect Nov. 1.

That’s because the rate already was increased April 1 from $14.67 per mcf (thousand cubic feet) to $15.68, noted Byron Harris, deputy consumer advocate with the consumer advocate division of the PSC.

Using 13 mcf as an average winter bill, that means the price will rise from $198.26 to $215.60 per month for the average customer, with those bills also including a customer service charge.

The bottom line could have been higher — $241.50 — if the PSC had approved a rate hike requested by Dominion Hope to compensate for $30 million in under-recovered funds.

That request was denied last week based on a few factors, including that Equitable Gas has applied to take over Dominion Hope and the fact that PSC administrative law judge “disallowed” $3.8 million of Dominion’s request for making decisions in purchasing gas that ultimately might have cost consumers more money.

“Combined with the acquisition of Hope by Equitable, there is an issue we have raised concerning how they do their accounting for storage gas that would have an impact on this portion of their rates,” Harris said. “I guess the best way to say it is there is a lot of uncertainty what the procedural status of Hope’s various cases, and the commission thought it best to keep rates where they are, and combine the request with the acquisition proceeding.”

Bob Fulton, spokesperson for Dominion Hope, said, “We were disappointed. We need to look at our options and see how we need to proceed. What is encouraging is that the price of gas continues to drop and that’s certainly good news for the consumer.”

But Dominion Hope customers will not see any payoff from the gas prices dropping this winter, at least in the short run. Last September, the price of natural gas in Appalachia was about $11, while this September, that figure has dropped to $7, Harris said.

Those prices just represent the wholesale cost of gas and do not include added on charges for shipping or piping the gas, Harris noted.

Likewise, even though the price of gas dropping will benefit Dominion Hope because customers will be paying more this winter and the company should be paying less for gas, “it would a long time to recover the underrecovered funds at the current rate,” Fulton said. “We are making gains on that, but we still have an underrecovered amount that we have not recovered yet.”

Equitable Gas has 13,000 West Virginia customers, mostly in rural areas, while Dominion operates in the more urban North Central West Virginia region with 116,000 customers.

Both of the gas companies tend to charge higher rates than Mountaineer Gas, which serves customers in southern West Virginia, Harris noted.

Mountaineer Gas customers also have seen some rate fluctuations this year, starting with $14.44 per mcf on Jan. 1, rising to $15.44 per mcf on April 1, with a decrease requested for Nov. 1 that would bring the rate down to $14.64 on Nov. 1. That would make an average winter bill of 13 mcf $190.32 before the customer service charge is added.

The April 1 rate hike came after Dominion kept prices lower than requested after the PSC asked the company to keep them down during the winter for customers’ sake.

“That was a conscious decision to keep people’s bills from going through the roof after Hurricane Katrina,” Harris said.

The decision not to approve Dominion’s Nov. 1 rate hike was done without any public hearings, Harris noted.

When the Equitable Gas and the Dominion Hope merger will be addressed by the PSC remains to be seen, Harris said. Also, if the merger goes through, a few different scenarios could emerge.

“The commission can order whatever they want,” he said. “Sometimes in the history of these things, you keep two rate districts. Even though they would be one company, you could have an Equitable rate district and a Hope district. And sometimes they are combined, and we come up with one rate for everybody. Either one of those options could happen.”

E-mail Mary Wade Burnside at mwburnside@timeswv.com.

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