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More cities join gas rate hike fight

by Helen Wilbers | January 21, 2020 at 12:16 a.m. | Updated January 21, 2020 at 12:36 p.m.
Natural gas meters tick away during chilly weather Monday, Jan. 20, 2020, in Fulton.

Thanks to other small towns joining the effort to prevent a spike in natural gas rates, Fulton's share of the bill has gone down, according to Fulton Director of Administration Bill Johnson.

While Fulton previously expected to pay up to half of the costs to dispute the rate increase, its share has gone down to about 14 percent.

"That's an incredible savings," Johnson said during the Jan. 14 Fulton City Council meeting.

Fulton relies on the Panhandle Eastern Pipeline Company for its supply of natural gas. The city purchases the gas from a supplier, but the pipe gets it all the way from Kansas at a connection point near Hatton.

Late last year, the company announced it would be increasing its rates to transport the gas from about 35 cents per decatherm of natural gas all the way up to $1.56 per unit. The jump would cost the city about $860,000 more per year, and it would result in the consumer rate going from $7.50 per unit to $8.75-$9.

The rate hike was expected to go into effect in March, but it's been delayed thanks to the intervention.

Johnson estimated an average household in Fulton uses about 20 decatherms per month during the winter, meaning the rate increase could tack an extra $30 onto that monthly bill. At the Interstate Municipal Gas Agency's urging, Fulton joined other small towns to dispute the rate increase with the Federal Energy Regulation Commission, the city announced in November.

IMGA is an Illinois-based nonprofit organization that works with local governments for gas supply risk-management and to advocate for customer needs, among other services, according to its website.

IMGA is splitting the cost of the dispute based on how many decatherms of natural gas the cities involved use. Since Fulton is the largest city involved, its share was expected to be about half the total (estimated at $200,000-$500,000).

"Since (November, IMGA) has solicited non-IMGA members to join the intervention in our group, including Macon," Johnson said, "Darrell (Dunlap, Fulton's utilities superintendent) spent two hours on the phone with Macon."

The FERC case is moving through the system, Johnson said.

"Our group submitted a counter-offer to FERC, and Panhandle sent one back," he said Jan. 14. "FERC said they're far enough apart, they're not even going to try to negotiate."

Instead, he expects FERC to settle it in court.

"I'm not sure on the timeline," Johnson said.


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