The Maine Public Utilities Commission has approved a midwinter rate hike for natural gas customers of Unitil Corp., but has cut the company’s request by roughly one-third.
An average home customer can expect to see a total winter bill of $837 increase by 7.5 percent, or an additional $63. The new rate will run until April 30, when the heating season ends.
Unitil had wanted to add roughly 27 cents across the board to the rate that the PUC approved last fall for gas this winter. For a typical home that’s heated with gas and burns 594 hundred-cubic-feet per winter, the proposal would have translated into a 10.4 percent increase, adding $87 to an average winter heating bill.
The rate change affects 19,350 home customers and 9,400 businesses, mainly in Greater Portland and the Lewiston-Auburn area. Business use varies greatly and big companies that buy gas from third-party suppliers aren’t affected.
The commission made the decision late Monday and released a formal order on Tuesday.
The extreme cold and high demand that have been pushing up energy prices across the country led Unitil to ask for the unusual midwinter rate hike.
Each fall, the PUC approves natural gas rates for the coming winter. Utilities are allowed to pass through the cost of the fuel they estimate they will need to serve their customers.
Unitil calculates its fuel costs based on the contracts it signs. But to hedge its bets, it also buys some gas on commodities markets. This year, the bitter cold has sent prices skyward for gas that’s earmarked for delivery later this winter. Unitil estimated that the extra expense would total $3.3 million.
After it’s review, the PUC wound up cutting that request by $1 million.
Tim Schneider, the state’s public advocate, who had intervened in the case, welcomed the PUC reduction in the rate.
“We’re glad that the commission gave careful … consideration to our recommendation to limit Unitil’s unusual request for a midwinter increase in the cost of gas,” Schneider said in a statement.
Schneider’s office had submitted evidence that Unitil’s higher fuel costs would be somewhat offset by other factors.
He noted that the utility’s projected costs for fuel this winter will ultimately be reconciled with what it actually spends, and that Unitil’s customers, through rate adjustments, will eventually end up paying the exact cost.
“But we didn’t want to see any additional, unnecessary burden for customers during this harsh winter, in which people are already paying higher than normal heating costs,” Schneider said. Asking the PUC for a midwinter adjustment is unusual. It’s a first for Unitil, which bought the former Northern Utilities in 2008.
Despite the proposed rate hike, natural gas still remains among the least expensive heating fuels in Maine, according to the Governor’s Energy Office. On a per-unit basis, it’s still roughly half the cost of heating oil priced at $3.87 a gallon.
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