The rate cut would lower prices for winter months.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- Area residents are about to see significant drops in natural gas bills as utilities cut their rates.
Dominion East Ohio said its average monthly bill will fall by $22 from November to January, compared with a year earlier, while Columbia Gas of Ohio said its average bill will be $40 lower.
Both companies said falling natural gas costs are allowing them to reduce the gas cost recovery rate that they charge customers.
Dominion East Ohio said it is cutting its rate from $6.17 per thousand cubic feet to $5.38 per thousand cubic feet, a 13 percent cut.
The charge would be 25 percent less than the $7.18 that was charged from November 2000 to January 2001.
The cut would put the average bill at $90 a month, compared with $112 a month in November 2000 to January 2001.
Columbia Gas said its rate will drop from $6.00 per thousand cubic feet to $4.80 per thousand cubic feet for a three-month period beginning in November.
The average bill will be about $106 a month, about $40 lower than a year earlier.
Reasons for reduction: The rate reductions follow a significant decline in national natural gas prices since earlier this year. Dominion East Ohio's gas cost recovery rate peaked at $8.70 in February.
Dominion East Ohio and Columbia Gas officials said the decrease in prices is the result higher production and lower demand. More gas wells being have been drilled, while the economy has slowed.
The gas cost recovery rate is the actual cost of securing natural gas supplies. State law requires that it be passed along to customers without profit. Utilities are allowed to make money from transportation charges.
Customers: Dominion East Ohio said the new price would affect 640,000 customers who buy gas from the company at rates regulated by the PUCO.
About 550,000 customers buy gas from other suppliers. These customers also will see a reduction in their bills, because the unrecovered gas cost part of the Dominion East Ohio transportation charge will fall to 27.5 cents per thousand cubic feet, a decline of 20 cents. This charge reimburses the utility for costs incurred in buying gas for customers before they joined other suppliers.