Press Release

PUC Approves Interim Gas Cost Recovery Decrease for Columbia Gas

Published on 1/27/2006

Filed under: Gas

HARRISBURG – The Pennsylvania Public Utility Commission today approved an interim purchased gas cost rate (PGC) decrease of more than $1 per MCF for Columbia Gas of Pennsylvania, Inc.

“As the bills reflecting a cold December and the spike in natural gas prices have begun to arrive in mailboxes, many families are being hit directly in the pocketbook,” said Chairman Wendell F. Holland. “I thank Columbia for providing some relief to its consumers by immediately passing on the lower costs it’s seeing on the wholesale market.”

Columbia lowered its gas rate from $14.0275 to $12.8885 per MCF, a decrease of about $1.1390 per MCF. Based on an average winter usage of 15 MCF, the average customer would see their gas rate go from about $281 to $264. The new rate is effective for service rendered on or after Feb. 1, 2006.

The Commission approved the increases by a vote of 5-0. In its application for the decrease, Columbia noted that gas prices have been particularly volatile this winter with gas prices varying more than $5 per MCF in the last 45 days.

Natural gas utilities file for a gas cost recovery annually. By law, the utility cannot make a profit by charging consumers more than what it pays for the natural gas. Companies can apply for interim increases or decreases to reflect significant changes in the wholesale natural gas market.

In doing so, the utility company recalculates its rates to reflect what it paid for the natural gas, and includes a reconciliation of undercollections or overcollections resulting from differences in actual sales and actual gas costs from prior projections. Columbia said if current gas prices remain unchanged, Columbia would experience an overcollection.

The Pennsylvania Public Utility Commission ensures safe, reliable and reasonably priced electric, natural gas, water, telephone and transportation service for Pennsylvania consumers, by regulating public utilities and by serving as responsible stewards of competition.

For more information about the PUC and additional press releases, visit our website at www.puc.state.pa.us.

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Docket No. P-00062200

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