January 28

Unitil requests unusual midwinter rate hike for Mainers

Regulators will decide soon whether to allow the 10% jump, which the company blames on extreme cold and high demand.

By Tux Turkel tturkel@pressherald.com
Staff Writer

and Dennis Hoey dhoey@pressherald.com
Staff Writer

The extreme cold and high demand that have been pushing up energy prices across the country are about to hit customers of Maine’s largest natural gas company: Unitil Corp. is asking state regulators for an unusual winter rate hike.

click image to enlarge

In this Jan. 8, 2014 file photo, homes are covered in snow and ice. The extreme cold and high demand that have been pushing up energy prices across the country are about to hit customers of Maine’s largest natural gas company: Unitil Corp. is asking state regulators for an unusual winter rate hike.

AP Photo/Kiichiro Sato

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Unitil wants to add roughly 27 cents across the board to the rate that the Maine Public Utilities Commission 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 translate into a 10.4 percent increase. It would add $87.19 to an average winter cost of $924. Business use varies greatly and big companies that buy gas from third-party suppliers wouldn’t be affected.

The PUC is expected to rule on the request Feb. 4. It’s not clear exactly when any rate hike would go into effect, but Unitil wants it to cover a period beginning Feb. 1. The new rate would run until April 30, when the heating season ends.

Maine has three other gas companies regulated by the PUC: Maine Natural Gas, Summit Natural Gas and Bangor Gas. Maine Natural and Bangor, which are much smaller than Unitil, calculate rates for most customers on a monthly basis.

Rates at Bangor Gas will change next week based on commodity prices, but it’s too early to say what they will be, said Andrew Barrowman, the sales and marketing manager.

“The way prices have been for the month of January, we expect it will rise,” he said.

Maine Natural Gas said Monday that it had locked in the price for its basic supply needs and wouldn’t be raising rates in February. Maine’s newest gas company, Summit Natural Gas, has initial rates in place for a year, according to the PUC.

Any rate change at Unitil would affect 19,350 home customers and 9,400 businesses, mainly in Greater Portland and the Lewiston-Auburn area.

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 says if it doesn’t get approval to make up the difference, it will be short $3.3 million.

SOME CUSTOMERS DISMAYED

Some Unitil customers are not happy about getting hit with a rate increase in the middle of the winter heating season.

Margo and Marc Badeau own and operate Top Shelf Collectibles out of a 5,000-square-foot space in the Gorham Industrial Park. The couple, who have no other employees, were not aware that Unitil was seeking a winter rate hike until contacted by a reporter.

Earlier this month, the Badeaus were informed that their base monthly rate for natural gas was being increased from $17.42 to $35.30. Marc Badeau said Unitil’s customer service department told him that the base rate covers personnel and other internal company costs, but does not include the price charged for gas usage.

They were not happy about the base rate increase, and were angered to learn Monday night that their natural gas bill might be going up again.

“It’s devastating. I just don’t understand how an increase like this can happen,” Margo Badeau said.

“It’s just mind-boggling,” her husband said. “In this climate, where small businesses are struggling to make ends meet, it seems like Unitil is taking advantage of the situation (extremely cold weather).”

(Continued on page 2)

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