Natural gas rate increases will be nominal, at worst, for residents of the city of Picayune.
It was announced earlier in the month that the city of Picayune would be part of a natural gas rate increase. According to a written release from the office of City Clerk Amber Hinton the increase was part of a request from the Gulf South Pipeline, the company that transports the utility to the city.
The release states that currently the price of natural gas is at a historic low due to low demand during the current mild winter and an abundance of the utility.
The total cost of the gas is made up of the actual cost of natural gas, 72.5 percent, combined with the cost of transportation and storage, the remaining 27.5 percent. Gulf South Pipeline provides storage and transportation of natural gas to the city of Picayune.
The company submitted a rate case in October of 2014, their first in 17 years, to request a rate increase, the release states.
After some settlement discussions between the customers and Gulf South Pipeline, only 40 percent of their original rate increase request was put into effect on Nov. 1, of last year, the release states.
Hinton’s release states that the increase amounts to .0002 cents per cubic foot of natural gas, equating to an average monthly increase of .42 cents for residential customers.
It was mentioned in previous coverage that the replacement of cast iron gas lines would negate the rate increase.
Hinton’s written statement says there will be savings, but could not say how much at the present time. However, there are immediate savings due to avoidance of Public Service Commission fines and fees for not completing the work since it was mandated by the agency. However, Hinton said while it’s too soon to tell how much savings will be involved with the actual line replacement, she did say in the statement, “Yes there should be savings over time with the cast iron replacement.”