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While higher electric bills loom on the horizon for local residents – there is an upside. On Tuesday, the Los Alamos County Council approved a 22 percent natural gas rate decrease.
“I feel whenever we can find the savings for the ratepayers we should pass the savings along to them,” Councilor Vincent Chiravalle told the Los Alamos Monitor Friday. “Gas prices have gone down and therefore it is appropriate for us to reduce rates for our customers.”
The DPU forecasts the average cost of gas for the next year will run about 30 cents per therm, (unit of heat energy), rather than 40 cents. Residential and commercial customers will realize a reduction from 70 cents to 55 cents per therm and the cost reduction for county and school customers will go from 67 cents to 52 cents per therm.
DPU Public Relations Manager Julie Williams-Hill said the average household uses 70 therms a month, which equates to an estimated average monthly savings per family of $10.50.
DPU manager John Arrowsmith said the rate was decreased “because we buy our gas on the spot market (index price) every month and that price has been much lower than expected.”
The recession has weakened the demand for gas, Arrowsmith said, adding also that new techniques have generated an increase in gas supplies.
“All we’re doing is passing on the savings in the market price of gas to our customers,” he said.
This is not the first time DPU has been able to pass savings on to its customers. Last year, there was a large decrease – the rate lowered from 92 cents to 70 cents.
Gas prices are really
volatile, however; the market dictates the prices,
Arrowsmith said the utilities department does receive a discount on its gas purchases. Last year, the county entered a gas pre-payment agreement of 20 cents per million BTU (British Thermal Units) for gas purchased during the next 30 years. As gas prices rise, the discount becomes less significant, but when gas prices decline, 20 cents has a big impact, he said.
Arrowsmith said DPU purchases gas from ConocoPhillips in the Four Corners area.
Because gas prices can fluctuate so widely, Arrowsmith said DPU maintains about $1 million in cash reserves.
Residents can exert a certain degree of control over their gas bills, Williams-Hill said. One suggestion is to request an energy audit by contacting DPU Energy and Water Conservation Coordinator Christine Chavez at 662-8333. Other suggestions include purchasing special water heater blankets, programmable thermostats and disposing of excess refrigerators and freezers.