MAKE US YOUR HOMEPAGE | Sunday, November 22, 2009 | WIRELESS CONTACT US | SUBSCRIBER SERVICES | SIGN IN SIGN OUT | MY PROFILE PAGE | MY ACCOUNT


Newspaper View Newspaper View      Print this story Print      Email this story Email      Comment Comment      RSS RSS     
Share      Bookmark Bookmark

ONG seeks $66 million rate hike
 
By ROD WALTON World Staff Writer
Published: 6/27/2009  2:21 AM
Last Modified: 6/27/2009  3:37 AM

Oklahoma Natural Gas Co. is seeking a $66.08 million annual increase in base rates despite a steep decline in natural gas prices during the past year.

ONG announced Friday that it filed the rate application with the Oklahoma Corporation Commission, which has 180 days to consider the request.

"We're trying to keep that balance of honoring our service to customers at a reasonable rate and yet get a reasonable return on our investment," ONG spokesman Don Sherry said. "It's a balancing act and something we try to do very carefully."

If approved in full, the rate increase would raise monthly bills by $5 for the average residential customer using about 78 dekatherms annually, Sherry said. A dekatherm is equal to 1 million British thermal units.

Utility officials said it was ONG's first proposed rate increase in four years.

A subsidiary of Tulsa-based ONEOK Inc., ONG serves about 800,000 customers statewide. About 265,000 of its customers are in the greater Tulsa area, according to reports.

ONG President Roger Mitchell estimated that the utility has spent more than $162 million in unrecovered infrastructure investments since the last rate increase in 2005. Those improvements included work on pipelines, compressors and valves.

"We have been able to do this through our commitment to maintaining, improving and expanding the extensive infrastructure that makes Oklahoma Natural's utility service accessible to Oklahomans," Mitchell said in a statement.

The rate
request, however, comes at a time when natural gas prices are less than a third of historic highs reached last summer. Natural gas at the Henry Hub in Louisiana closed Friday at $3.81 per million Btus in trading on the New York Mercantile Exchange.

Those prices may not increase dramatically anytime soon if supply is any indication. The nonprofit Potential Gas Committee, which is supported by the Colorado School of Mines, reported earlier this month that the U.S. reserve base, including unconventional natural gas plays, totaled 1,836 trillion cubic feet, the most in the group's 44-year history.

ONG's fuel cost charged to customers has reflected the falling prices, Sherry said. The highest fuel-cost charge for customers was the $11.05 per dekatherm on October 2008 bills, he noted.

The utility charged $7.67 per dekatherm for June bills. ONG's fuel-cost calculus is a weighted average because the company buys natural gas from current spot markets, futures contracts and seasonal rates.

ONG also has delivery costs such as manpower and maintenance figured into its rate structure, Sherry said. The utility's distribution system includes 17,000 miles of pipeline.

"It is confusing to customers," Sherry said.

ONG customers seeking price stability can secure locked-in rates at the beginning of each winter if they want, although they take the chance that those advance rates are sometimes higher than the eventual fuel costs charged.

In fact, if natural gas prices continue to decline, the utility's future fuel costs could drop as well. These cuts could even offset the requested rate increase, Sherry noted.

"There's a potential silver lining if the trend continues," he said. "We can't predict what's going to happen, but there is that potential."

The last ONG rate hike was a $57.7 million annual jump approved by the Corporation Commission in October 2005. The utility had asked for a $99 million increase in its application.

Shares of ONEOK fell 1 percent Friday to close at $29.01 on the New York Stock Exchange.

What it will cost you:

if approved in full, the rate increase would raise monthly bills by $5 for the average residential home.
Rod Walton 581-8457
rod.walton@tulsaworld.com
By ROD WALTON World Staff Writer

Newspaper View Newspaper View      Print this story Print      Email this story Email      Comment Comment      RSS RSS     
Share      Bookmark Bookmark

Reader Comments
       Add your comment

19 comments have been made on this story so far. Tell us what you think below!

Report Comment Reporting Comments

If you see a comment that violates our terms and conditions, please help us by clicking the "Report this Comment" link next to a comment. That will alert the web staff to review the comment. Thank you.  -- Web Editor Jason Collington
 
 
Report Comment
oddsare, (6/27/2009 6:04:37 AM)
It is not the fluctuation of the per dekatherm charge that bothers me. It is the fact that $25 of my typical $40 bill is fees just to get the gas to me.
Report Comment
Oh My Lord, (6/27/2009 6:28:12 AM)
There ya go, oddsare.

The gas bill in a vacant house I own with only the hot water pilot running and no water use was almost $35 last month.

I have owned that house over 20 years and not one new gas line has been run in that time anywhere near it.

Not one hole has been dug nor any ONG personnel on my property except to read the meter.

So what it amounts to is that I am paying for ONG to extend their service to some other area, which for all other businesses is a cost of doing business and for ONG is an opportunity for the consumer to pay for every month over and over and over. Sweet deal for ONG.

ONG has a stranglehold on OK consumers, and that is a fact.

The cozy hand holding they have with the Corporation Commission is just more of OKlahoma business as usual.

The OK consumer has no power nor authority to police ONG salaries, perks to employees, etc.

Just might as well surrender.
Report Comment
Graybeard, Tulsa (6/27/2009 6:32:02 AM)
ONG says they want a reasonable return on their investment. Sure they do! So do I, but none of us are making reasonable returns in the stock market, certificates of deposit or US Treasury Bonds. They can't make any money selling us the natural gas right now so they increase the delivery fees.
It's a shell game, meant to be confusing for the rate payer. We have no recourse...there is no competition. We are being taken for a ride, folks.
Report Comment
Teddy Bear 1975, Eufaula (6/27/2009 6:44:52 AM)
ONG is a rip off. I hope they dont the requested rate increase. We already paying an enough and they making more then an enough money. Vote NO for the rate increase commision
Report Comment
Intermittently Semi-Serious, Broken Arrow (6/27/2009 7:00:54 AM)
Raise your hand if you think they won't get the increase...that's what I thought.

I saw that...both of you.
Report Comment
Independent Thinker, Tulsa (6/27/2009 8:45:20 AM)
\\//

Once again you peasants don't understand how the game is played.

ONG wants a rate increase to pay for their capital investment and operating costs. Of course a portion of that is all that is really needed.
The company asks for twice as much as they actually need, so the Corporation Commission can
cut the request in half.

Then the Commissioners can come to the peasants and say, "We socked it to em' folks. We only gave em' half of what they wanted cuz' we're looking out after you. Reelect us."

Of course part of those operating expenses are
camouflaged contributions to the reelection campaigns of the commissioners. They also include fat expense accounts for the executives and luxury cars with 'free' gasoline which they don't need but are provided anyway, as a bennie.

That makes the commissioners happy, the company is happy, and the peasants are happy because they are only paying half of what they thought they might have to pay.

Its nothing more than a shell game designed to make everyone happy.

//\\
Report Comment
Gouged&Abused, (6/27/2009 9:16:11 AM)
Why has the cost of natgas has remained $7.00+ per unit, when the cost of natgas has been hovering around $3-$4 per unit for several months now? I think ONG has been making plenty of profit off of the customer already. And if they claim its because they locked in at that level, they're either skirting the truth or working it in their favor, rather than providing a reasonable product at an reasonable price, to their customers.
Report Comment
ajohnb, Jenks (6/27/2009 9:38:54 AM)
People, companies are in business to make money and pay dividends to the stockholders. Period.

Anything that they can get to make this happen better is just money in the bank.

Our efforts would be better focused at the Corporation Commission and electing new people everytime there is an election. That way you can send a mandate to the commission to hold the line on rate increases.
Report Comment
plm, (6/27/2009 10:26:39 AM)
Oklahoma Corporation Commission is on the take, especially that Bob Anthony who has been there for many years. I have complained many times to both ONG and OCC about the high cost of gas that is being passed on to customers and I get the same canned answers from both parties. OCC is in bed with ONG.
Report Comment
SRV, (6/27/2009 12:34:43 PM)
Maybe we can get one of those Neo-Con guys that cheats on their wives and then talks about the Bible and how he has moral values to come over and fix this. LOL
Report Comment
vrcTulsa, Okmulgee (6/27/2009 1:32:21 PM)
Times are already hard for many people and its those people that this hike is going to hurt the most. As for me, I don't really care, my gas bill isn't high anyways, but still why raise rates in an already hurting economy? That just doesn't make any sense.
Report Comment
kyote, (6/27/2009 1:49:45 PM)
I don't know where Mr Sherry has his head stuck, but I looked at a few of my past bills and my fuel cost has gone up.Independent thinker hit the nail on the head.
Report Comment
zTruth, Tulsa (6/27/2009 2:53:54 PM)
$66 million in rate hikes is a careful balancing act? Feel free to contact the Oklahoma Corporation Commission and voice your concerns.

Pass it along, too.

Oklahoma Corporation Commission
2101 North Lincoln Blvd.
Oklahoma City, OK 73105
(405)521-2211

OCC Mailing Address:
Oklahoma Corporation Commission
P.O. Box 52000
Oklahoma City, OK 73152-2000

Tulsa District Office
440 S. Houston Avenue, Suite 114
Tulsa, OK 74127
(918) 581-2296
Report Comment
Angry Citizen!, Bluejacket (6/27/2009 4:06:21 PM)
This is nothing in comparison to what the liberal dems in congress want to do to your energy bills- Give ONG a rate increase, they've never had their customers experience a rolling blackout.
Report Comment
Charley, (6/27/2009 4:22:22 PM)
QUOTE:
"We're trying to keep that balance of honoring our service to customers at a reasonable rate and yet get a reasonable return on our investment," ONG spokesman Don Sherry said. "It's a balancing act and something we try to do very carefully."
UNQUOTE

The utility companies should be community co-ops, not greedy private companies with monopolistic attitudes. These crooks take advantage of our communities & couldn't care less if you are cold or hot. The politicians are their best friends, not the communities they service (<<< stud = keyword).
Report Comment
Peter Piper, TULSA (6/27/2009 5:41:34 PM)
Thanks, ZTRUTH, for the addresses. My electric, water, and telephone bills all are less than 1/2 of gas bill.
PLM: Mr. Anthony has been there many years, but he is the only one I trust. The other two--one man, one woman--are fairly new and are questionable, in my thought. Anthony has voted AGAINST rate hikes by different groups before.
Report Comment
Angry Citizen!, Bluejacket (6/27/2009 9:55:17 PM)
Charley-

They ought to be Unionized, you don't deserve any service for the prices you pay- Your greed, wanting to heat your hot water heater needs to be checked, you're soo greedy! If you can find sombody else who can do it, you'll find that COOPs and the public service have replaced them, YOU DON'T have a CHOICE~! Fool~! Gave away your rights to the free market a long time ago- and now you gots to pay~!
Report Comment
FS, Broken Arrow (6/28/2009 12:59:03 AM)
Isn't it amazing how everyone but those who actually pay the bills (the consumers), go whine and then are allowed to charge more?

That would work rather nicely if we could do that - let the utilities go ahead and charge more ... we'll just go to the boss and tell him/her we want a raise.
Report Comment
Youve Got To Be Kidding!, (6/28/2009 10:19:19 AM)
How dare they ask for more money! Who is the incompetent ONG person/department that locked in the price of ONG's gas at such a high cost anyway? Can they not renegotiate more frequently, to take advantage of lower costs of fuel, or maybe lock in for a shorter period, and at a lower price in the spring/summer months, when demand is lower? Shouldn't customers demand a refund based on ONG's overcharging for the cost of fuel for so long?

Unbelievable the extent that businesses will go, to take advantage of the paying customer, and make it seem like a good thing too!
 

 
Add Your Comment 
In order to post a comment on this article, you must sign in to Tulsaworld.com. If you do not have a site account, you can create an account for free.

 
  
Post Your Comment
 






Tulsa World

Home | About Tulsa World | Advertise With Us | Privacy | Usage Agreement | FAQ and Help | Contact Us | Today's Headlines
Copyright © 2009, World Publishing Co. All rights reserved.




Advanced Search