Kinder Morgan seeks annual gas cost adjustment

Kinder Morgan Inc., the provider of natural gas in Wellington, in October filed its annual gas cost adjustment with the Colorado Public Utilities Commission for its North Central/Front Range service area. If approved, winter natural gas bills will increase 47 percent.

The filing reflects an expected increase in projected market costs for natural gas beginning Nov. 1. In accordance with state law, the company recovers the cost it pays to purchase natural gas on behalf of its customers on a dollar-for-dollar basis, without realizing any profit or loss.

Dan Watson, president of KMI's retail group, said that the increase in natural gas prices is being driven by the same laws of supply and demand that affect other commodities.

"The price of natural gas on the open market has increased steadily over the past few months and experienced a significant jump during the past few weeks, mainly as a result of the hurricanes in the Gulf of Mexico," he said. "Disruptions in production and the transportation infrastructure in the Gulf Coast region served to increase the value of natural gas produced in the Rockies, which supplies most of our Colorado customers."

For customers in KMI's North Central/Front Range service area, which includes Wellington, the new rate will be $1.2883 per 100 cubic feet (CCF). Based on annual usage of 1,000 CCF, the typical household will now pay about $1,288 instead of $876 for natural gas service. As a result of the increase, residential customers who typically use 179 CCF in January (when bills are usually the highest) will pay approximately $74 more, an increase of about 47 percent, for the natural gas portion of their bill. The typical small business using 727 CCF in January would pay roughly $300 more, an increase of about 48 percent, for its natural gas compared with January 2005.

"Despite the increase in prices, the rates Colorado customers pay for natural gas are significantly below the national average and supplies are adequate to meet the needs of customers," said Watson. "Even so, we're committed to doing all we can to help our customers and have taken some steps on our own to stabilize gas costs and minimize the impact to customers."

A large portion of winter supplies will be purchased within predetermined price limits, which will protect Kinder Morgan customers from continued natural gas price volatility during the upcoming heating season.

In addition, the company is educating customers about the options available to help them keep their energy costs in check, including: budget billing to stabilize bills; setting thermostats back, especially at night or when away (each degree represents a 2- to 3-percent savings on heating bills); installing weather stripping; closing doors to rooms not being used; and inspecting the heating system to ensure it's operating efficiently.

Eligible Kinder Morgan customers may apply for assistance through various state and federally funded initiatives like Low-Income Energy Assistance Program (LEAP), which is administered by the Colorado Department of Human Services, and Energy Outreach Colorado.

Despite the rate increases, natural gas remains the best energy value for the home, offering customers substantial cost savings over propane or electricity, as well as greater reliability and convenience, KMI officials said. The new rates, if approved, will take effect Nov. 1 and will be reflected in the following billing cycle.

Kinder Morgan's retail division serves as the natural gas utility for approximately 240,000 residential, commercial, agricultural and industrial customers in Nebraska, Colorado and Wyoming. The company also sells and services a wide variety of appliances, such as furnaces, stoves and fireplaces, including high efficiency equipment that can further offset fuel costs.