Oregon PUC Predicts Substantial Increase in Winter Natural Gas Prices

Oregon’s supply of natural gas comes from Canada and the Rocky Mountain region.

(SALEM, Ore.) - If you use natural gas, brace yourself for an expected sharp rise in prices. That was the collective opinion shared today in a briefing before the Oregon Public Utility Commission by natural gas providers in Oregon.

The Commission was told that natural gas prices this coming heating season will likely be significantly higher than a year ago due to growing demand, tight supplies and international pressures as Oregon’s natural gas companies secure supplies for their customers for the next year and beyond.

Commission gas analyst Ken Zimmerman said, "This is very much the opposite of what we saw last year." "Demand is robust while supplies remain tight. As a result wholesale prices are significantly higher than a year ago."

NW Natural expects prices to be 35 to 40% higher, Avista Utilities 10 to 15% and Cascade Natural Gas15 to 20% higher than a year ago.

"This is sobering news given the other economic pressures consumers are already facing on other fronts," Commission Chairman Lee Beyer said. "I can’t urge strongly enough that customers should to start thinking now about how they can use less natural gas this coming winter."

By comparison, in 2007 the Commission reduced NW Natural’s rates for residential customers by 8% and 1.3% for Avista Utilities. Cascade’s rates rose by just under 1%.

Wild cards that could drive natural gas prices higher include the hurricane season and any unforeseen gas pipeline disruptions.

Oregon’s supply of natural gas comes from Canada and the Rocky Mountain region.

NW Natural Gas, Avista Utilities, and Cascade Natural Gas will file requests with the Commission in late August to adjust their rates as part of the annual Purchased Gas Adjustment (PGA). The annual adjustment allows companies to pass through their actual cost of purchasing gas to customers.

Commission staff will analyze the requests and the Commission will make a decision. Customer rates would change effective November 1st 2008.

NW Natural serves customers in Northwest Oregon. Avista Gas serves portions of Southwest and Northeastern Oregon while Cascade Natural Gas serves Central Oregon in the Bend region and parts of Northeast Oregon.