Vicksburg Mayor Laurence Leyens said this winter’s rise in gas prices is due to surcharges meant to help customers manage payments. And, as spring approaches, prices are already beginning to drop, he said.

The reason for the increase is a result of the city’s effort, begun a year and a half ago, to spread out payments, Leyens said in Monday’s city board meeting, responding to complaints about bills, including a reader’s letter published in Sunday’s edition of The Vicksburg Post. Leyens said the plan was to keep monthly bills on an even-as-possible keel. Some residential winter bills last year, after costs began soaring, were as high as $600 to $800. Each rate increase has been amortized over 12 months as a fuel price adjustment, reflecting the city’s cost.

The letter, written by Jessie Moses of Vicksburg, asks for an explanation from city officials as to why her bill has increased from $52.74 in October to $201.40 in February, despite her concerted effort to cut down on gas usage. The amounts reflect an increase of nearly four times the amount in a four-month period.

Leyens said officials had to &#8220guess” how much gas would be used by the public when they make estimates in September. Two consecutively warm winters didn’t help.

&#8220We bought gas a year and a half ago when it was $12 and $13 a unit,” he said. &#8220We had a warm winter last year and another warm winter this year and we’re emptying that expensive gas that we still have to pay for,” he said.

In April 2005, city residents were paying $8.15 per thousand cubic feet for natural gas. That rate increased to $19.20 a year later. Currently, customers have been spending about $6.85 per thousand cubic feet on the gas adjustment alone, said Strategic Planner Paul Rogers, who buys natural gas for the city to resell through about 10,000 meters. That cost is added to a base price of $12.10 per thousand cubic feet, a figure that has increased gradually three times in the past year and a half.

While base prices are set by the Mayor and Board of Aldermen and don’t change unless a vote is passed, gas adjustments fluctuate monthly. Rogers said, since May 2006, adjustments have gone from $16 to $5.58 and have dropped as low as $1.36. Prices are expected to continue to fall, Rogers said, but no rate has been locked in yet.

&#8220They’ll be closer to the actual month prices,” he said. &#8220They will drop considerably.”

Although prices have been up across the board, Leyens said the city continues to sell gas to residents without making a profit.

&#8220We’re selling gas at a loss every year. The gas adjustments are a way of financing it forward,” he said. &#8220We’re taking what you didn’t pay in the cold months and spreading it out further.”

The city incurred a debt of $4 million, based on the price of gas last fall. Leyens said that debt is nearly paid off, which means price drops should be reflected in bills in the next month or so.

&#8220We’re at $750,000, which we’ll make up this month,” he said. &#8220We’ve spent about $5.8 million (on gas) in the last two years.”

In April of last year, officials deposited $2.5 million into the gas fund. Customer payments between October 2005 and October 2006 were to go toward the purchase of more gas and to repay the city for what it has already spent.

The city increased gas, water and garbage collection rates as part of its 2005-06 budget in an effort to decrease the general fund subsidy being transferred to its gas, sewer, water and residential garbage collection costs. Department employees have worked out payment plans with low-income residents to reduce the number of turnoffs for non-payment.

GAS BILLS

Examples of bills at 120 ccf usage per month. Most people use much less than 120 ccf a month for residential use during the summer months. The use of 120 ccf a month is more common during winter months, but is being used on a monthly basis to make it easier to study costs.

Jan.-Sept. 2005 $97.78

Oct. 2005 $122.17

Nov. 2005 $124.00

Dec. 2005 $137.81

Jan. 2006 $239.05

Feb. 2006 $238.80

March 2006 $230.40*

* Since May 2006, gas prices have fluctuated between $154.80 and $262.08. Figures are calculated with $145.20 base gas rate for 120 ccf and fluctuation of gas adjustments, as reported by Strategic Planner Paul Rogers.

ON THE AGENDA

Also at Monday’s meeting, Vicksburg officials: