Knoxville warns of high gas bills

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KUB warns of high gas bills

Supply cost, cold winter credited

October 1, 2000

By Stan DeLozier, News-Sentinel business writer

A cold winter may be what it takes to get natural gas customers hot when they see their heating bills. Even though the National Weather Service is predicting normal temperatures this winter, Knoxville Utility Board officials wants its 75,000 gas customers to be forewarned of two things: East Tennesseans may have been spoiled by four consecutive mild winters, and KUB's natural gas suppliers have increased costs by 25 percent.

The increase coupled with just average temperatures could result in bills 50 percent higher than the previous winter, said Larry Fleming, president and chief executive officer of KUB.

"We don't want our customers to be surprised," he said. "People have gotten used to mild weather."

NWS records show that January, the coldest month, has recorded temperatures 4.8 degrees warmer than average since 1995. February temperatures since that year have averaged 5.6 degrees above normal.

Susan Edwards, manager of planning and communications for KUB, said there are two components to a residential gas bill. The first covers KUB's cost of operation and represents about 30 percent of the bill. This part has remained unchanged since 1995, she said.

The second component, which may change every month and has been rising since early this year, represents the cost of natural gas and the transportation cost associated with delivering it from the interstate pipeline to the KUB distribution system.

"These costs are passed directly to the consumer with no markup," Edwards said. "Residential bills have always contained this variable component, but the swings in price from month to month have not been drastic.

"The difference this year is that the costs have increased so significantly, it will mean a noticeable increase in the typical bill. This winter, we expect this portion to represent approximately 70 percent of the cost."

A way that KUB recommends to offset the high winter bills is to spread the payments to months when the cost is normally lower. They call the program the Balanced Pay Plan.

KUB averages utility usage for the previous 12 months and calculates a level, monthly payment amount, so customers know exactly what their bills will be. Customers can sign up using the form on the back of their KUB bill or by contacting a KUB customer service representative.

Edwards said the owner of a residence that uses natural gas and has a utility bill ranging from a low of $128 a month to a high of $214 a month would pay $168 each month on the Balanced Pay Plan.

She said 30,000 or about 16 percent of KUB's customers are on the plan

http://www.knoxnews.com/news/15838.shtml

-- Martin Thompson (mthom1927@aol.com), October 01, 2000


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