By Charlotte Lane
Chair, West Virginia Public Service Commission
You’ve heard it on the news. It comes as no surprise that that natural gas prices around the country will be higher this winter. Now is the time to prepare in order to minimize the effect of those rising prices. You may need to adjust your budget, but you should definitely take action to lower your heating bills.
First, let me explain why this is happening. There are two components that make up a natural gas utility bill. One is the base rate, which covers all expenses the utility incurs in providing service except the cost it pays to obtain the gas itself. The other is known as the Purchased Gas Adjustment (PGA), which is just the cost the utility pays to obtain natural gas, and does not include any profit for the company. The PSC does not regulate the price of natural gas – that price is determined by competitive markets.
Every year, gas utilities tell the PSC how much they expect to pay their gas suppliers from November 1 through October 30 of the following year. Our Analysts examine the utilities’ gas purchasing practices, review the reasonableness of the requested rates, and ensure that each utility did everything possible to secure a reliable gas supply at the lowest possible price. If the actual price turns out to be higher or lower than the estimate, the utility must include a true-up the following year.
There are steps you can take to offset the cost of higher heating bills. Start by making sure your home is well insulated. Cover any air leaks with weatherproofing – pay special attention to the attic. Use weatherproofing strips and caulking around all windows and exterior doors to seal air leaks. A door snake is a quick fix for drafty door sills. Hang thick, insulated curtains over windows and keep them closed. Finally, plug the chimney when it isn’t in use.
You may also want to consider contacting your utility about a budget billing plan, which is based on your average usage and anticipated energy prices for the coming year, to avoid extremely high utility bills during the heating months. Some utilities offer a set monthly amount and adjust your plan with an annual true-up bill. Other companies make more frequent adjustments. The specifics vary between companies, but the end result for the customer is a stable bill amount throughout the year.
These simple steps will keep you – and your budget – more comfortable this winter.