Council mulling gas rate increase
April 30, 2009 · Updated 2:35 PM
By Kevin Hanson
Enumclaw residents are looking at the prospect of paying more to stay warm this winter.
A proposal to increase natural gas rates by 10.5 percent was introduced at the last meeting of the Enumclaw City Council.
Chris Searcy, the city's public works director, explained wholesale costs for natural gas will jump 15 percent during the coming year. If some sort of increase is not passed on to customers, he said, the city will be looking at operating its natural gas utility in the red.
The rate increase was brought up during a public hearing at the council's Oct. 11 meeting, but no one testified either for or against the rate jump. At the urging of Councilman Kevin Mahelona, the hearing was continued to council's next meeting (Monday), to provide a second opportunity for public comment.
The 10.5 percent rate increase would translate to another $5.90 on the average monthly gas bill, according to a cost analysis provided by Searcy. During the winter months, when gas use jumps, the average Enumclaw gas bill would climb by $8.44.
Natural gas supply costs have climbed dramatically in recent years, and city rates have been impacted along the way. The city imposed a rate hike of 7.5 percent just one year ago. Searcy explained the rate charged to customers has to pay for gas and maintain the citywide distribution system (including employee costs). In addition, the department charges enough to steadily add to a reserve fund, which can only be used for future natural gas costs.
That reserve fund can be used to offset increased supply costs, as is the case this time around. While the city is looking at increasing rates by 10.5 percent, the cost of purchasing gas is climbing by 15 percent.
Applying a positive spin, Searcy noted the proposed rate increase would bump Enumclaw's rate to nearly 90 cents per therm (the unit of measurement for municipal customers). Puget Sound Energy has been charging its customers almost 96 cents, he said, while Cascade Natural Gas is proposing an increase to 92 cents. Puget Sound Energy was recently granted a rate increase and will start charging about $1.02 per therm next month.
In looking at comparative numbers, Searcy did not include the neighboring town of Buckley. Buckley City Administrator Dave Schmidt said customers there are now paying 74 cents per therm; an increase could be included as part of the 2005 budget, he said, adding that any rate hike would likely be a small one.