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Gas heating bills on the way down

December 27, 2001

Gas heating bills on the way down



By STACEY DANZUSO
chbbureau@innernet.net


Chambersburg gas heat customers will pay about $25 a month less this winter on their gas bills.

Lower gas prices are the reason for the difference, said John Leary, gas superintendent.

Last winter, gas prices soared to more than $10 a decatherm, but the gas the borough has in storage and currently is buying is all about $5 or less a decatherm, Leary recently told the Chambersburg Borough Council.

"Gas prices have gone down more because of a mild summer and mild fall, so demand is down," Leary said.

Gas costs will be about 60 percent less than they were projected to be in February, Leary said.

However, because storage, supplier and distribution costs remain fixed, the average savings for a residential gas heat customer will be about 20 percent less than the average $125 bills last winter, Leary said.

He also had good news about the $1 million deficit the gas department faced last winter.

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The department incurred the shortfall over a period of a few months because the formula it used to calculate the purchased gas adjustment didn't reflect the skyrocketing gas prices.

So while customers were seeing higher bills, the charges didn't keep up with what the borough was actually paying for the cost of natural gas.

The combination of a new formula and a cold spring that kept customers using their heat longer was enough to recoup the shortfall that was originally expected to take two years to recover, Leary said.

In addition to his report on the gas department's operations, Leary asked the council to approve amendments to its contract with the Municipal Gas Authority of Georgia (MGAG), which supplies the borough's gas.

The council approved the amendments, which require the borough to pay for its gas storage throughout the year rather than at one time and end speculative financial transactions by MGAG with the borough's gas supplies.

"In order to get more control, we will pay for the storage of gas," Borough Manager Eric Oyer said. "We're not paying any more, just at a different time."

Since the borough's contract began last year, MGAG had the authority to take gas the borough put into storage and sell it on the gas market for a higher cost.

Most of the profit would go to the borough. However, there were no guarantees the gas purchased to replace that could be bought for the same amount or less, Leary said.

In the new agreement MGAG already approved, it will not make transactions without the borough's approval.

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