Last winter's polar vortex contributes to SourceGas natural gas price increase

SourceGas has filed its annual Gas Cost Adjustment with the Colorado Public Utilities Commission for its North Central service area, impacting approximately 14,090 SourceGas customers. The filing reflects an increase of $9.89 for the typical residential customer’s average monthly bill for the upcoming period, which begins November 1, 2014 and continues through October 31, 2015. The filing is a pass-through rate, meaning that SourceGas passes along the cost of natural gas to the customer without any profit to the company resulting from the filing.

In accordance with state law, the company recovers the cost it pays to purchase natural gas on behalf of its customers on a dollar-for-dollar basis, without realizing any profit or loss. The GCA mechanism ensures that customers pay exactly the same amount the company paid to purchase natural gas for them. The new rates will take effect November 1, 2014 and will be reflected in the next billing cycle.

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“We are still enjoying exceptionally-low natural gas prices,” said Mitch Pebley, senior director of operations for SourceGas. “Even with this increase, it continues to be the most affordable and best energy value for our customers compared to propane or electricity, with the added benefits of being clean, abundant and domestically produced.”

For residential customers in the North Central service area, the total of the new volumetric rates will be $0.8894 per therm. Based on an average monthly usage of 69 therms, the typical household will now pay an average of $73.42 per month instead of approximately $63.53 per month for their natural gas service. Residential customers who typically use 139 therms in January (when bills are usually the highest) will pay approximately $135.68, an increase of about $19.92, or approximately 17.21 percent, in January 2015, as compared to January 2014.

A strong contributing factor to the gas cost pass-on is last year’s particularly cold winter, brought on by the polar vortex. Cold weather increases the usage of all energy sources, prompting an increase in the price of energy across the board. SourceGas rates are set annually for each upcoming year, and the price spike that resulted from the cold temperatures occurred after the rates for 2014 were set, which is reflected in today’s rate filing. The difference between the set rate and the actual cost of gas accumulates in a deferred balance account over the 12 months, and is then incorporated into rates to bring the account back to zero.

Fortunately for SourceGas customers, a return to normal winter temperatures, along with other factors such as robust production and increasing storage capacity, are projected to contribute to stabilize natural gas prices.

According to the American Gas Association, the country’s strong natural gas supply and delivery infrastructure suggest that future demand for natural gas can be met at costs well below the peak market prices of the past decade.

Additionally, while today’s rate filing does reflect an increase, it is still representative of historically low natural gas prices. A price of $0.8894 per therm is still well below a 2008 high of $1.4744 per therm for North Central Colorado customers.

SourceGas also offers energy efficiency programs that are designed to assist their natural gas customers in Colorado. The programs include energy audits, rebates on equipment and insulation measures, a program for residential income-qualified customers, and a custom program for larger commercial and industrial gas customers. SourceGas customers can obtain additional information, rebate guidelines and details on the programs by visiting or by calling 1-800-563-0012.

Other options available to help customers keep their energy costs in check include: balanced billing to stabilize bills, setting thermostats back, installing weather stripping; closing doors to rooms not being used; and inspecting the heating system to ensure it is operating efficiently. Eligible SourceGas customers may apply for assistance through various state and federally funded initiatives like Low-Income Energy Assistance Program (LEAP), which is administered by the Colorado Department of Human Service and supplemented by Energy Outreach Colorado. For those who are located in areas served by SourceGas, but not yet customers, SourceGas can provide no cost bids, savings calculations and information on conversion and financing opportunities by visiting or by calling 1-855-583-6959.