Natural Gas Forum:

What Utilities & Consumer Groups are Doing to
Prepare Customers for the Winter Ahead

September 8 at 1:00 pm

1200 West Washington – Main Hearing Room

PHOENIX – As Phoenix area temperatures continue flirting with the 110 degree mark, Arizona regulators are turning their attention to winter heating prices. 

“The meteoric rise in natural gas prices has us concerned that customers need to be preparing now for high winter heating bills,” Commission Chairman Jeff Hatch-Miller said.  “Consumers of all income levels will see higher bills but we are especially concerned about low- and fixed-income consumers.”

The Commissioners are holding a forum on Thursday, September 8 starting at 1:00 pm to learn how utilities and consumer groups are preparing for the effect of higher winter heating bills. 

Just as electricity use peaks in the summer because of air conditioning, natural gas usage increases in the winter due to heating.  Statistics show that Arizona’s residential consumers use about seven times as much natural gas in January as they do in August. 

Natural gas is traded on the commodity markets and prices cycle from highs to lows like other commodities such as oil, coal or gold.  High natural gas prices will affect electricity prices because natural gas is a primary fuel for a number of Arizona power plants.  Spiking prices trickle down and affect all classes of customers – commercial, industrial and residential – as well as the price of manufactured goods.

The forum will include presentations from utilities about their consumer education and outreach plans.  Consumer advocacy groups will also attend and can offer comments, suggestions or updates about their own outreach programs to the Commissioners during an open comment period.

“Arizona utilities run various programs such as budget billing programs, low income assistance programs and others intended to help those in need,” Commissioner Bill Mundell said.  “We want to get an update on those programs at Thursday’s meeting.”

Commissioner Marc Spitzer is particularly interested in weatherization programs for the elderly or people on fixed incomes.  Commissioner Mike Gleason said he hopes to get statistics from the utilities on the number of people participating in low-income, budget billing or weatherization programs.

“As the pressures on household incomes increase from higher gasoline, heating and cooling costs, I want to be assured that the utilities are doing everything in their power to alert customers that they will be seeing higher bills this winter,” Commissioner Kris Mayes said.

“If there are new programs planned, or if other outreach efforts that should be considered, I would like to hear about them at Thursday’s meeting,” Chairman Jeff Hatch-Miller said.

(Proposed Sidebar)

More Information on Natural Gas Bills

When you pay your gas bill, you are paying for the gas you use, plus the costs of transporting it and delivering it safely to your home or workplace.  It is important to note that gas companies are not allowed to make a profit on the cost of natural gas.  You pay the gas company for the fuel you use on a dollar-for-dollar basis.

The gas company earns a rate of return based on the costs of delivering gas to customers.  The cost of putting the pipe in the ground, maintaining the meters, having crews available to respond at a moment's notice to an emergency, training and all other expenses are examined during a rate case.

When there is an imbalance between the market price of natural gas and the amount the company is charging its customers, a utility can file an application with the Commission for a Purchased Gas Adjustor (PGA).  The Commission monitors each gas company's PGA balance to ensure that the company is not over- or under-collecting.

UniSource has a pending application for a PGA adjustment for its customers.  (The Commissioners will not be voting on or considering the merits of this application during this meeting.)