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Peoples Gas customers to see increase in bills

Just how much more 75,000 bay area customers will have to pay won't be decided before January.

By STEVE HUETTEL

© St. Petersburg Times, published December 14, 2000


TAMPA -- Some 75,000 Peoples Gas customers in the Tampa Bay area will see their bills jump again next year because of rising demand and tight supplies of natural gas across the nation.

Peoples and seven other Florida gas companies got permission from the state Public Service Commission on Tuesday to increase the "purchased gas adjustment" they charge to recover costs from natural gas suppliers.

The average residential monthly bill could jump as much as 83 cents, about 2 percent, but company officials won't decide before January how large the increase will be, spokesman Mitch Lubitz said. Peoples raised the average bill by $2.67, about 8 percent, in September.

Harsh winter weather in the Northeast and Midwest has drawn down natural gas supplies and driven up demand nationwide, Lubitz said.

"Unlike with electricity, the gas market is national," he said. "What happens everywhere else affects us."

Gas utilities in Florida can't mark up the cost they pay suppliers of natural gas, which traditionally makes up about a third of a customer's bill. The PSC sets a cap on how much utilities charge for gas purchases each year, and the companies can apply for mid-year adjustments if prices swing significantly.

Peoples estimates it will end up paying $2.9-million more for natural gas than it charged 250,000 customers across Florida this year. If the current purchase adjustment stayed the same, Peoples would have a $3.8-million shortfall next year.

The utility's natural gas expense doubled over the past year, Lubitz said.

Nationwide, spot market prices for gas have hit $10 per thousand cubic feet, four times more than a year ago. Peoples didn't take the full brunt of those price spikes because it buys through fixed-price and adjustable contracts as well as on the spot market, Lubitz said.

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