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Explainer: So Why Does A Susquehanna County Gas Company Have To Raise Rates 33.2% When Susquehanna County Is The #1 Shale Gas Producer In PA?

On September 19, the Public Utility Commission is holding a hearing on a proposed 33.2 percent rate increase for the Leatherstocking Gas Company that provides natural gas service to 450 residential and commercial gas customers in Susquehanna County. Read more here.

The company’s slogan “Local Gas For Local People” is based on the fact the Independent Fiscal Office reports Susquehanna County is the #1 shale gas producer in the state and has been for some time. Read more here.

According to Leatherstocking’s website, their cost of natural gas increased from $2.9365/MCF in November 1, 2020 to $3.5469/MCF in November 1, 2021 to $9.4244/MCF in July 1, 2022.

The latest natural gas cost far exceeds any price they paid since November 1, 2016, according to the website.

But having access to local natural gas and paying a reasonable price for it are in no way related because the price customers pay is set on international markets, not by the cost of producing that gas right under our feet.

The U.S. price of natural gas increased 525 percent since June 2020 and hit a 14-year high this month causing the price of natural gas directly used by customers to increase dramatically in Pennsylvania, but also caused a surge in the cost of electricity because a significant portion of electric generation is now natural gas-fired. Read more here.

On August 10, the Public Utility Commission warned customers of five major electric utilities will increase their electricity prices, 4 of the 5 will increase from 11.4 percent to 19 percent. Read more here.

The U.S. Energy Information Administration has also warned U.S. retail electricity prices nationwide will continue to rise driven by rising natural gas prices. Read more here.

Another factor in U.S. natural gas price spikes is very clear-- exports of natural gas through LNG terminals to high-priced European and Asian markets is helping to dramatically increase U.S. natural gas costs.

That relationship was seen clearly after a fire and explosion at a Texas LNG export terminal closed it in June. Natural gas prices immediately fell in the U.S. because more natural gas would be available for U.S. customers.

And, natural gas has continued to spike or drop in response to rumors the Texas LNG plant is reopening-- price spikes up-- and when the reopening date slips further into the future-- the price drops. Read more here.

The reasons for these U.S. price spikes and drops can be easily tracked by reading the daily business media-- Wall Street Journal, Reuters, Bloomberg and the Financial Times.

All PA Natural Gas Suppliers Dramatically Increased Prices

The cost of natural gas provided to customers by the seven largest natural gas utilities in Pennsylvania increased from 31 percent to 154.6 percent over the last year, according to information from the Public Utility Commission.

Peoples Gas Company residential rates increased the most-- 154.6 percent-- and Columbia Gas customers saw the lowest increase-- 31.2 percent.

The major natural gas utilities saw these increases--

-- Peoples Gas Co. (residential) 154.6% increase

-- Philadelphia Gas Works 152.2% increase

-- Peoples Natural Gas Co. 142.3% increase

-- National Fuel Gas 134.7% increase

-- PECO Gas 86.3% increase

-- UGI Gas Division 41.5% increase

-- Columbia Gas 31.2% increase

Natural gas customers are seeing the biggest increase in energy charges because of the natural gas cost spikes on foreign energy markets caused by the Russian war in Ukraine and by increasing exports of U.S. natural gas in the form of LNG to Europe and Asia. [Read more here.]

Over half of Pennsylvania households use natural gas as their primary home heating fuel. [Read more here.]

On August 10, the Public Utility Commission also warned customers of major electric utilities their rates will increase by as much as 19 percent this quarter starting on September 1. These increases are also driven by the cost of natural gas-fired generation and hot weather demand. [Read more here.]

Both natural gas and electric utilities adjust the rates they charge their customers for energy every quarter, either up or down, depending on the price of natural gas or electricity they buy.

Shop For Competitive Rates

Customers of both natural gas and electric utilities can shop for independent providers of natural gas and electricity and are not locked in to the price charged by utilities.

Only 14 percent of residential customers got their natural gas from competitive suppliers in 2020. [Read more here.]

Natural gas customers can go to the PUC’s PA Gas Switch website and electric customers to PA Power Switch websites to learn more about their options.

Next Quarterly Rate Changes

The next quarterly rate increases/decreases by natural gas companies will be starting September 1, October 1 and November 1, depending what schedule the utilities are on.

Here are the details of how utility natural gas charges increased in the past year, along with their next expected quarterly rate change date--

National Fuel Gas 134.7% increase

May 1, 2021 Annual Review $3.8520

August 1, 2022 $9.0436

Nov. 1, 2022 (next increase/decrease)

Philadelphia Gas Works 152.2% increase

June 1, 2021 Annual Review $3.5700

June 1, 2022 $9.0057

Sept. 1, 2022 (next increase/decrease)

Columbia Gas 31.2% increase

July 1, 2021 Annual Review $3.8512

July 1, 2022 $5.0583