Natural gas price to rise next month
www.theleafchronicle.com By JILL NOELLE CECIL The Leaf-Chronicle
GAS RATES
Natural gas rate comparison after local 20 percent increase (based on 100 cubic feet monthly usage)
- Clarksville -- $69.26
- Greater Dickson Gas Authority -- $79.76
- Springfield Gas -- $69.93
- Nashville Gas -- $83.50
- Knoxville Utility Board -- $95.33
- Middle Tennessee Natural Gas -- $70.10
Natural gas will cost an average of nearly $12 more per month in Clarksville after a 20 percent rate increase approved Thursday takes effect Feb. 1.
The city's cost of buying the commodity has increased 130 percent since a year ago, City Gas Manager Tae Eaton told members of the City Council's Gas, Water and Sewer Committee Thursday.
With the increase, Clarksville's natural gas prices will remain lower than other Tennessee cities, Eaton said.
The average household uses 100 cubic feet of natural gas in the month of February. The price for that amount in January was $57.71. In the coming month, the same amount will cost $69.26.
Many other cities change their rates monthly to follow commodity prices.
The committee reluctantly approved the increase, which does not require any further approval.
"Can we get by with 15 (percent increase)?" asked Councilwoman Margie Clark.
Based on current projections, the department would end the fiscal year with about a $300,000 deficit if the increase were 15 percent, said Barbara Harris, comptroller for the Gas, Water and Sewer Department.
Clarksville, along with utilities nationwide, is experiencing the highest natural gas prices since April 2001, said Gas, Water and Sewer General Manager Dwight Luton.
Luton said the department fended off raising rates as long as possible with the hopes that the commodity prices would stabilize.
"We can't control it," Luton said. "If we knew what the market would do, we'd probably work on Wall Street and make lots of money."
Fluctuation has led to two rate increases and two decreases during the last few years. The department raised natural gas prices 20 percent in July 2000 and again by 35 percent in December 2000. It lowered rates 10 percent in February 2002. In June, it restructured the billing tiers, creating a 6 to 8 percent decrease for customers, Harris said.
Luton said it is possible the rates will be decreased as early as the end of the fiscal year, June 30, depending on the natural gas market.
Eaton said several factors are responsible for the recent price spike. Demand for the commodity is higher now because of the bitterly cold winter.
Oil prices are also at play, Eaton said. A strike in Venezuela and concerns about a possible war with Iraq are driving up per-barrel prices.
Higher oil prices translate into higher natural gas prices because several industries switch to natural gas when other fuels get pricey, he said.
Councilman Marshall Ross, who is not on the committee, attended the meeting because of his interest in the market and its effect on the city.
After he studied a chart reflecting the climbing prices charged to the Gas Department, Ross said the rate increase is unfortunate but necessary
"The city's price went up 40 percent since Dec. 10," Ross said.
Jill Noelle Cecil covers city government and can be reached at 245-0262 or by e-mail at jillcecil@theleafchronicle.com.