Officials hope gas rates will stay low

Published 8:56 am Saturday, January 13, 2007

City officials hope natural gas rates will remain low throughout the winter.

“If gas rates come down and stabilize, the cost of power and electric rates will come down overall,” City Manager Kenny Davis said Thursday.

Tuesday, during Vidalia’s Board of Alderman meeting, Davis said the city’s natural gas rates went down 33 percent since November 2005.

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“This is an accumulation of decreases of cost to the city which is passed on to the customers,” Davis said Tuesday.

Davis said citizens paid approximately $50 more per month per 100 cubic ft. for natural gas last year.

The reason, Davis said, was because the city had to invoke the fuel adjustment clause in order to pay for its natural gas to sell to the citizens.

According to a document showing yearly cost of natural gas to Vidalia, the city’s natural gas rate increased about $3 from $8.3 per 100 cubic feet in August 2005 to $11.6 per 100 cubic feet in September.

The rate increased $3 more in November.

Davis said the city paid the increase without charging the citizens during August and September but was forced to add the fuel adjustment rate of 3.4 cents in November.

“It’s just a simple equation of supply and demand,” Mayor Hyram Copeland said Thursday.

“In 2005, after Katrina, when all the wells out in the gulf were damaged the price of gas went up.”

Copeland said the city pays for its municipal services like sanitation, police and fire departments with the money from citizens’ utility bills.

The natural gas rate per 100 cubic ft. was $7.2 in November and Davis said the city lifted the fuel adjustment rate.

Copeland said he was “elated anytime we see a cost reduction in our city services.”

Davis said Thursday that natural gas rates would stay down if Louisiana continues to have a mild winter and no storms in the Gulf of Mexico that could destroy infrastructure like pipelines or natural gas wells.