May 2017 (4)
August 2016 (2)
May 2016 (1)
March 2016 (1)
February 2016 (1)
January 2016 (1)
December 2015 (1)
October 2015 (1)
August 2015 (1)
June 2015 (1)
May 2015 (1)
February 2015 (1)
January 2015 (1)
November 2014 (2)
October 2014 (2)
September 2014 (6)
August 2014 (1)
July 2014 (5)
June 2014 (1)
March 2014 (3)
February 2014 (2)
January 2014 (1)
November 2013 (3)
October 2013 (1)
August 2013 (3)
July 2013 (4)
May 2013 (4)
April 2013 (3)
March 2013 (2)
February 2013 (3)
January 2013 (4)
December 2012 (6)
November 2012 (9)
October 2012 (10)
September 2012 (9)
August 2012 (14)
July 2012 (17)
June 2012 (14)
May 2012 (13)
April 2012 (18)
March 2012 (14)
February 2012 (10)
January 2012 (12)
December 2011 (8)
November 2011 (11)
October 2011 (10)
September 2011 (13)
August 2011 (10)
July 2011 (6)
June 2011 (12)
May 2011 (8)
April 2011 (8)
March 2011 (9)
February 2011 (6)
January 2011 (9)
December 2010 (8)
November 2010 (17)
October 2010 (8)
September 2010 (12)
August 2010 (15)
July 2010 (10)
June 2010 (15)
May 2010 (9)
April 2010 (11)
March 2010 (13)
February 2010 (10)
January 2010 (14)
December 2009 (14)
November 2009 (10)
October 2009 (17)
September 2009 (20)
August 2009 (18)
July 2009 (22)
June 2009 (12)
Answering Questions
Avista Utilities
Clark Fork
Community Service
Customer Service
Energy Assistance
Energy Efficiency
Environment Facts
Hydro power
Infrastructure upgrades
Lake Coeur d'Alene
Natural Gas
Power Outages
Reliability Facts
Renewable Energy
Renewable Facts
Smart Grid
Spokane River

Natural gas rates are down, but why?   

Tags: Natural Gas, Rates

If you’re an Avista natural gas customer in Idaho and Washington the price you pay for natural gas went down Monday. Effective June 1, the utility commissions in both states approved our request to decrease natural gas rates. 8.1% in Washington 6.7% in Idaho. Oregon customer rates were not changed. Natural gas rates in Oregon went down 4.1% in November 2008. 
The decrease is because the cost we pay for wholesale natural gas has continued to go down. Normally, we’d ask for this type of rate adjustment in the fall, but we know times are tough and so getting you a lower rate sooner is more important than ever. This is the second decrease in rates this year – the other came in January when we were all buried in snow.
Because Avista is a regulated utility, we can’t simply raise or lower rates at anytime. We file requests with the utility commissions who review our proposals, hold hearings, listen to your comments and in the end, set our rates and profits that are reasonable and fair.
Here’s where it gets tricky. Imagine if your local gas station had to determine what price it would charge for the entire year, about 11 months prior. They’d gain or lose money along the way, while customers continued to pay the same price.
We basically do the same thing with natural gas, but typically in the fall, we file a Purchase Gas Adjustment (PGA) with the commissions to true-up the costs. This means that you pay what we pay – which is the best price we can secure on the market.
The two recent rate decreases were an early true-up of your rates. We have a lot more detail on this subject here. 
Are there any questions about natural gas or anything else that we can answer? Contact us here and let us know.
Posted by  System Account  on  6/4/2009
2  Comments  | 0  Links to this post | Bookmark this post with:          


Stan G  commented on  Tuesday, August 18, 2009  10:32 PM 
I do appreciate the 11% reduction but according to the energy information association, well head prices for natural gas are down almost 60% from a year ago.

Dan K  commented on  Tuesday, August 18, 2009  10:32 PM 
You’re right; the wholesale natural gas market doesn’t exactly mirror what you pay in rates. Here’s why: The lowest cost on a trading market can never be predicted in advance, so companies hedge their buys to round out the lowest reasonable price in an attempt to smooth out the volatility of the wholesale markets for their customers and unique circumstances. We buy our gas for the winter in advance (this is an oversimplification for sure) because prices tend to be higher when demand is higher. The rate decreases so far this year in Washington and Idaho are both paying for gas that has been purchased and will be purchased in the future for a period of time. If market conditions continue to decline, you may just see another rate decrease in the fall as well.

Avista Blog Moderator

Add a Comment

We encourage comments on this blog, but this is a family friendly conversation, so please check out our discussion guidelines so we’re all on the same page. By submitting a comment, you agree to these terms and our Privacy Policy.  

Customers must have a My Account and be logged in to comment.
Login to My Account | Create My Account


We're hopeful that this space will encourage thought provoking and informative community discussions about issues related to our products and services. Currently you must be an Avista customer to participate in the conversation, but stay tuned. In the coming weeks we'll also provide an opportunity for non-customers to participate in this forum.