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New natural gas formula almost doubles heating costs

February 28, 2001

New natural gas formula almost doubles heating costs



By STACEY DANZUSO / Staff Writer, Chambersburg


CHAMBERSBURG, Pa. - The Chambersburg Borough Council approved a new natural gas formula Wednesday that will spread out an average $200 increase for residential customers over the next two years to make up for a nearly $1 million shortfall in the borough gas department.

Jim Crowley, gas superintendent for the borough, approached the council last month about the need for a new formula to calculate the purchased gas adjustment on gas customers' bills.

The new formula will forecast the purchased gas adjustment needed to keep up with the estimated cost of gas. It will spread out the amount under-collected over the next 22 months.

"The only way I can stay a jump ahead is this formula," Crowley said.

The old formula used the price of gas from two months earlier and could not keep up with this winter's skyrocketing natural gas costs.

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While customers have been seeing higher bills this winter, the charges didn't keep up with what the borough was actually paying out for the cost of natural gas, he said.

The borough will use the new formula for the rest of the year and for 2002 to recover the loss and, officials hope, prevent a repeat of the problem.

Both commercial and residential gas customers will be subject to the new formula. It is expected to add on about $75 this year and $125 next year for the average residential customer, Crowley said.

Customers will see their purchased gas adjustment cost go from 27 cents a unit to 43 cents beginning today, said Borough Manager Eric Oyer.

At that rate, Oyer said the borough customers will still be paying less than the nearest competitors.

But in an effort to help residential customers struggling with this winter's already enormous heating bills, the council voted to extend the current grace period for late payments.

The borough has in the past given customers until April 1 to finish paying off the high winter heating bills.

The council voted Wednesday to extend that period for this year only until July 1, provided the residential gas customer is making regular payments on what they owe.

Both the amendment to the gas rate ordinance and the extension of the grace period passed unanimously.

"In plain English, we're passing the cost on to the customer, but the borough gets zilch," said Council President Bernard Washabaugh.

Oyer said the shortfall accrued rapidly, but gas department officials kept expecting gas prices would level off and things would even out.

"We might have been okay in January if it had plateaued," Oyer said. "No one thought gas would be $10.20 a decatherm in January."

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