Atmos awaits OK to increase distribution charge

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— Chilly nights have arrived in the Steamboat Springs area, and Atmos Energy said it doesn't expect to increase natural gas rates as winter approaches.

The price of the gas is based directly on what Atmos pays for it, regional spokesman Kevin Kerrigan said. Natural gas prices are determined through trading on the national commodities market, and the product is trading at about 25 percent of what it was last summer.

"This last quarter we actually left the rates where they were because natural gas was pretty constant," Kerrigan said.

Atmos files quarterly if it wants to change its gas cost adjustment. The next filing will come in October if natural gas prices shift dramatically and the company wants to shift prices to correspond.

Natural gas was trading at $3.12 per million British thermal units Thursday. In June 2008, it was trading at about $13 per million BTU. Because of that, rates increased 23 percent for local customers last summer. Local rates have decreased as prices have decreased, Kerrigan said.

A BTU is the amount of heat required to increase the temperature of a pound of water by 1 degree Fahrenheit. One million BTUs amount to about 1,000 cubic feet of natural gas.

The Dallas-based company did file last month for an increase in the fees that cover its operations, called local distribution charges, Kerrigan said.

"Over the last seven years, we've been able to not have to ask for an increase, but just the cost of everything, of having to do business, has forced us to file for this increase," he said.

Atmos Energy placed ads in early July explaining the proposed increase. The company aims to increase its annual revenues in Colorado by $3.9 million, or 12 percent. The Colorado Public Utilities Commission will decide whether to allow the increase.

If approved, the change would increase residential bills in Northwest Colorado by $1.62 a month, or 3 percent, according to a news release. The average monthly bill for commercial customers would decrease by $1.89, or 1 percent.

"The primary reason for the proposed changes in rates is to recover the increased cost of maintaining and expanding the company's gas system," an advertisement stated. "The company serves 19 percent more customers and has invested more than $60 million in its natural gas delivery system since its last filed cost of service increase based on test year ending June 30, 2000."

The utilities commission has six months to review the request. Kerrigan said he didn't expect Atmos to raise rates until December or January if it gets the OK.

When the company prepares for winter, it typically buys half its natural gas now and half during the colder months, Kerrigan said. That's so Atmos has the flexibility to buy natural gas at different prices.

"This year is a little out of the ordinary from previous years because the prices remained pretty low, pretty stable," Kerrigan said. "Right now, you would start to see increases come in from the natural gas market simply because it's the nature of the business, if you will. As natural gas contracts are agreed upon and supplies are guaranteed throughout the winter, prices tend to start moving up from that point."

Atmos Energy has agreements to provide natural gas to Steamboat, Hayden and Craig, Kerrigan said. Oak Creek doesn't have natural gas, Town Clerk Karen Halterman said.

The current natural gas rate for Northwest Colorado is about 69 cents per 100 cubic feet for residential and about 67 cents per 100 cubic feet for commercial and public authority customers.

Although Atmos doesn't expect a rate increase, events such as a hurricane in the Gulf of Mexico could cause an increase in the cost of natural gas, Kerrigan said.

"We have no control over that market," he said, "so we do the best to secure the highest quality, the best quantity at the best price."

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