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As energy costs fall, utilities seek to lower electricity, gas rates

By the OGJ Online Staff

HOUSTON, Oct. 15, 2001 — From the Northeast to the Southwest, utilities are petitioning regulators to lower electricity and natural gas rates as energy prices fall.

Southwest Gas Corp. Monday asked Nevada state regulators to lower rates for natural gas customers by at least 10%. NSTAR Electric & Gas Co. asked Massachusetts Department of Telecommunications and Energy to cut electricity rates by as much as 27% for certain customers.

NSTAR’s customers that receive “default” service will be eligible for the rate cut if approved by regulators. Default prices apply to new customers and customers who have moved from another utility’s service territory, changed electricity suppliers, or changed names on accounts since deregulation in March 1998.

Rates will drop in Boston Edison Co.’s territory to 6.4¢/kw-hr from 8.7¢/kw-hr and in Commonwealth Electric Co.’s rates will fall to 6.3¢/kw-hr from 8.7¢ and ratepayers of Cambridge Electric Light Co. default service will see service costs cut to 6.2¢/kw-hr from 8.4¢.

“We are delighted to see world energy prices falling so rapidly,” said NSTAR CEO Thomas May, noting the benefits to his customers.

NSTAR has already asked for a 32% cut in natural gas prices for its customers in New England.

Meanwhile, Southwest Gas asked the Public Utilities Commission of Nevada to lower rates through the purchased gas adjustment for customers by nearly $51.6 million statewide. Gas costs are a direct pass through dollar for dollar. The decrease in gas costs for residential customers will range to 13.9% from 10.8% depending on usage.

However, the utility is still proceeding with its general rate increase of $29.4 million. The company is asking to implement the fuel cost adjustment and the general rate increase, the first in 5 years, at the same time. This way customers will experience only one rate change.

Since the last gas cost adjustment approved by regulators, prices for natural gas have decreased significantly. Gas prices for this winter are forecast to be less than half of winter 2000-2001. Southwest Gas said if these low prices continue to hold, there should be another gas cost decrease in spring.