Natural gas rates lowered for city|[6/6/06]

Published 12:00 am Tuesday, June 6, 2006

As temperatures rise for summer, rates were lowered for Vicksburg’s natural gas utility.

The city is also preparing to reopen this week a main gas line shut down this year due to a land shift along a railroad right-of-way.

June bills will be $3 less per thousand cubic feet – or $15.76 instead of $19.20, said strategic planner Paul Rogers, who buys for the city-owned system that serves 10,000 meters. Most customers use gas for heat and consume only minimal amounts for cooking or water heating in the summer.

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The decrease, unanimously approved by the Board of Mayor and Aldermen on Monday, still leaves the rate almost double the $8.15 per thousand cubic feet residents paid in April 2005.

As applied to specific bills, a customer using 20 ccf will pay $35.81, said Tim Smith, gas manager in the planning department. At the previous rate, the bill for 20 ccf would have been $42.69.

The city increased gas, water and garbage collection rates as part of its 2005-2006 budget, approved before last August, in an effort to decrease the general fund subsidy being transferred to its gas, sewer, water and residential garbage collection costs. The board then approved three monthly increases in gas rates to pass along increasing costs and approved an additional $2.5 million allotment to the city gas fund in April. Last month, rates were dropped slightly, from $19.92 per thousand cubic feet to $19.20.

The latest decrease comes in the fuel adjustment portion and is added to an ordinance-established base rate to cover costs due to monthly fluctuations in market price, Rogers said. The adjustment falls from $9.02 per thousand cubic feet to $5.58, he said. The base rate remains $10.18 per thousand cubic feet.

Smith said the city hopes to reopen its pipeline along the Kansas City Southern Railway line’s right-of-way by the end of this week. That line has been capped since March, when the gas flow was disturbed by sloughing in back yards of houses on Pearl Street following work on the railroad, which residents said had contributed to slides since Christmas.

Since, the city has paid $32,000 monthly to Gulf South Pipeline Co. to reserve the line while also paying $14,000 to Southern Natural to reroute the gas through a line further to the north. Once it has used up the gas bought from Southern Natural Gas Co., Smith said, it will reopen the southern line, which could ease prices further in coming months,.

&#8220We only bought (through) the first 10 days of June” from Southern Natural, he said. &#8220I want to use that gas up that we bought off of Southern and once that’s up we will switch over to Gulf South. That will help us next month if the prices don’t go outrageously up.”

In other business Monday, the board: