Atmos Energy Corp. on Friday announced it is seeking an 18 percent reduction in the residential rate for its natural-gas customers in Southwest Colorado.
The request, which must be approved by the Colorado Public Utilities Commission, would lower the cost of residential gas from 58 cents per hundred cubic feet to 48 cents per ccf as of May 1.
This means the average monthly bill for a Southwest Colorado customer would go from $46.61 to $40.24.
Commercial gas rates would fall by 19 percent, from 55 cents to 48 cents per ccf. Atmos Energy said this would equate to an average monthly bill of $171.58 instead of $205.47.
In a news release from Atmos Energy, company officials said the wholesale price of the natural gas it buys has dropped, so it was trying to pass on the savings to its Southwest Colorado customers.
Atmos Energy does not make any profit on the cost of natural gas it distributes to its utility customers, Gary Schlessman, president of Atmos Energys Colorado-Kansas Division, said in the release. When the costs we pay for natural gas move downward, we pass on those decreases to our customers on their bills.
Atmos Energy said it makes its money from the fee it charges customers for delivering their natural gas, which is regulated by the Public Utilities Commission, and from LDCs or local distribution costs which are not.
Brian Martens, spokesperson for Atmos Energy, said, Hopefully people will be happy. Its a pretty sizable decrease.
Martens said the cost of natural gas in Southwest Colorado had fallen because supply had ballooned.
Weve got a stockpile for 100 years. And the second reason is that all over Colorado, theres been a warm winter so the gas they stored wasnt used. But all over the country, the price of natural gas right now is less than it was 10 years ago. Name another energy commodity thats true of, said Martens.
Indeed, residents straining under the rising cost of gasoline, which hit around $4 per gallon this spring, are sure to welcome the break on their natural gas bills.
In recent years, the production of natural gas which has roared because of new drilling techniques that allow companies to unlock fuel trapped in deep formations has far outstripped demand, causing the price of natural gas to plummet to a 10-year low.
Some industry analysts fret that natural gas companies bottom lines will suffer because of the low price.
Atmos Energy took in $4.8 billion in revenue in 2011 and cleared $206 million in profits.