>>>>> "MN" == Michael Hohmann <[EMAIL PROTECTED]> writes:
MN> Dorothy J. TItus states, in part...
>> ...And now Center Point Energy proposes a gas rate hike that
>> will raise residential gas costs by 4% while raising business costs
>> by only 1%. And this comes on top of gas prices that are reported
>> to be between 30-50% higher than last year.
MN> The lower industrial rates for gas are for 'interruptible
MN> service' customers that have dual-fuel capability. They get a
MN> low rate when plenty of gas and pipe capacity is available,
MN> and get shut-off when residential customers require all they
MN> can get, in really cold weather. The industrial customers
MN> have oil-burning and/or coal capability, for when the gas
MN> supplier curtails their 'interruptible' gas supplies. Some
MN> industrial customers may have a high-priority gas need and
MN> purchase 'firm' supplies, paying a much higher price. And the
MN> residential 'firm' customers pay for that level of service
MN> too-- they aren't ever curtailed.
MN> The natural gas itself is a commodity and the cost flows
MN> through directly to the customers... its the
MN> fixed-distribution costs that vary by customer class, and
MN> according to the level of service provided (firm or
MN> interruptible). It's the distribution costs that would be
MN> increased by Center Point-- their operating costs. The
MN> commodity cost of natural gas has been rising in recent years
MN> due to increased demand and tighter supplies... just like oil
MN> costs, gasoline and diesel.
>From reading the stuff CenterPoint has sent out, I wasn't so sure
about this. They recoup their costs through a mixture of fixed price
+ per-therm charges. I don't think that it's entirely obvious to
decide which is which. It may seem that way, but accounting is at
least as complex as statistics, and we all know what they say about
THAT branch of mathematics!
Also, note that curtailable services aren't goign to be cheaper PER SE
than firm --- indeed they must involve some logic that is not going to
be free, and so must be at least as expensive as the kind of simple
flow-through that's all you need for firm delivery. The savings on
curtailable supply is NOT in the delivery cost, it's in being able to
manage the commodity cost.
Another concern I have about this is that the revision in pricing will
tend to deter conservation (since a higher proportion of the price
will be paid whether one uses the commodity or not). Is that really a
policy we want right now? Especially when the nation as a whole is
trying to clean up the atmosphere by substituting more and more
natural gas for coal? Also, I fear that we'll all REALLY take it in
the neck after CenterPoint has moved more of its charges into fixed
fees, and then the per-therm rate skyrockets again....
--
Robert P. Goldman
ECCO
[EMAIL PROTECTED]
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