Louisian’s largest natural gas provider, Delta Utilities, sought to explain Wednesday amid rising anger from customers and elected officials, telling state regulators that they work to prevent price volatility from squeezing ratepayers.
A double whammy of unusually cold winter weather and high natural gas prices have caused for many customers across h, in some cases reaching several hundred dollars. Those high costs — and the recent change of most residents now receiving a separate gas bill after Delta’s acquisition of Entergy’s gas business — have caused
The saga is the latest affordability problem that h residents have faced in recent years, after insurance and electricity bills have emerged as high-profile issues for customers, elected officials and regulators.
The h Public Service Commission — a five-member elected body that regulates utilities — agreed Wednesday to move up an audit to this summer of Delta’s billing and costs. And the commission will let utilities spread the cost of skyrocketing bills over several months in a bid to lessen the burden on customers, after a series of votes Wednesday.
Rahsha Williams, head of the Leo S. Butler Community Center in Baton Rouge, told the commission that she’s seen a dramatic influx of residents struggling to pay their gas bills from Delta. Many are seniors on fixed incomes and are struggling to afford other essentials, like groceries or medication, she said.
“I see seniors on fixed incomes walking in with shaking hands because their gas bill is now higher than their grocery budget,” she said.
Before last summer, most residents had a single, combined electric and gas bill from Entergy. In the summers, gas bills were low and electric bills were high. The reverse was generally true in the winter.
Delta Utilities CEO Tim Poche told the commission that the separate gas bills from his company are contributing to customer alarm. He said Delta is encouraging people to enroll in levelized billing, which spreads volatility in prices throughout the year, making bills more predictable.
Delta buys some of its gas in the spring and summer when prices are low, then stores it in caverns for future use in the winter when demand and prices are higher, Poche said. The company also signs contracts allowing it to procure gas at its first-of-the-month price to avoid wild price swings.
“While it is true we do not profit off gas, that’s a complete pass through to customers, we do exercise a significant amount of strategy in order to defer and eliminate the volatility in that gas price.”
During Winter Storm Fern, about 11% of Delta’s gas supplies were purchased at spot prices, which had soared to record levels, Poche said. That — combined with higher usage from cold weather — was enough to cause bills to skyrocket.
Documents filed with the PSC show the price of gas procured by Delta soared in January and February to more than double its normal cost. Gas prices around the country shot up amid unusually severe winter weather the past two months. Delta passes the entire cost of gas through to customers.
“That market price right in the middle of the Fern event is a lot of the cause for that increase,” said Ryan King, Delta’s chief regulatory and growth strategy officer.
h | The Times-Picayune reported in early February that skyrocketing gas and electric bills were likely coming after price hikes for natural gas in January and February. In addition to ubiquitous gas-powered heaters and appliances, Louisian has unusually high natural gas usage in powering its electric generators. Those fuel prices are also passed on to customers.
Utilities here have long bet big on natural gas as a cheap and abundant resource, with a sprawling network of pipelines making it easy to spin up power plants around the state. But periodic price shocks and storms over the past few years have ignited debates over how the state should best manage its power supply. Cyclical rising costs have prompted some advocates to question whether the state is overreliant on natural gas.