Fee Change Affects Low-Use Natural Gas Customers The Most

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You may not have noticed but your natural gas bill has changed. Natural Gas distributors in Ohio next month will complete the phase in of a fee change. WOSU reports it’s people who don’t use much natural gas who are paying the price. Included in the monthly natural gas bill is a distribution charge. It’s hidden. It’s not a separate line item but it’s there. It’s the cost of getting natural gas into your home. Over the past year the way gas companies charge the fee has changed. Some customers benefit, others suffer.

For example, if you heat with natural gas and your home is on the larger side, drafty or you just use lot fuel, you benefit from the change. If you don’t use much gas, your bill has gone up. In some cases doubled or tripled.

Here’s why. Up until last year, the distribution fee was based on usage…the more you used, the higher the distribution fee. Next month a year-long phase in of a flat distribution fee will be complete.

The flat fee will stand at about $18 a month.

The Public Utilities Commission of Ohio approved the levelized distribution rate structure last year. Shana Eiselstein speaks for the PUCO.

“That distribution rate is really a fixed cost for the company. Meaning it’s going to cost the same for the company to deliver gas to every customer whether you use as much or as little as your neighbor. It still costs them the same amount to get that gas to your home,” Eiselstein said.

The distribution fee covers costs like maintaining pipes, monthly meter reading and billing systems upkeep. During the phase in the levalized free has been increasing as the usage fee decreased.

Columbia Gas spokesperson Ken Stammen said the new structure could reduce winter heating costs since customers will no longer be charged by volume. He said many customers may not have noticed the increased distribution rate because it had a minimal impact on their bills and the price of gas has declined.

But critics say the new rate structure is unfair. Mark Berkowitz speaks for the Ohio Consumers Council which opposed the change.

“It really is affecting people who don’t use as much,” Berkowitz said.

For example Let’s take a customer who only uses 100 cubic feet of natural gas a month. heir bills have tripled. They are going from paying about $6 a month to paying $18 a month – thanks mainly to the flat distribution fee. That means, for these low use customers, more than 90 percent of their gas bill does not pay for natural gas, but the fee to get it into their homes.

Berkowitz said while it doesn’t sound like a lot of money it is a disproportionate increase and could affect conservation efforts.

“What will eventually happen is that the burden for this will fall on low-usage, low-income customers. And eventually will create a disincentive for them to save on their energy bills. We’re also concerned that people who don’t use a lot of gas, say for instance customers who heat their homes with electricity, they opt to drop out of natural gas service entirely,” Berkowitz said.

Berkowitz said this could lead to utilities losing money and theoretically ask for additional rate increases to supplement the loss.

The PUCO and Columbia Gas defend the new rate structure. They say it will help customers better manage their bill. Again, the PUCO’s Shana Eiselstein.

“With the monthly delivery charge now customers will know month to month exactly what that amount is going to be. And they’ll know that that’s what’s going to be on their bill,” she said.

The Consumers Council hopes to reverse the distribution fee change. As part of its agreement with the PUCO, Columbia Gas agreed to study the change’s impact on customers. The Consumers Council hopes the study proves the change is unfair.

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