The utility predicts gas supply charges will rise an average of $32.23 per year.
The Pennsylvania Public Utility Commission each year asks utilities to predict where rates will be eight months in advance.
As National Fuel Gas Distribution Corp. looks ahead to Aug. 1, the utility is predicting a slight increase in gas prices.
For now – until at least Feb. 1, when the next quarterly rate adjustment takes place – rates remain at some of lowest levels in years. An adjustment that took place on Nov. 1 lowered the average monthly bill for a customer who uses balanced billing from $68.46 a month to $66.51.
It’s not clear what will happen to prices on Feb. 1.
But as 2019 ends, National Fuel is predicting that eight months into the new year prices will be slightly higher.
The company is projecting an increase in overall gas supply charges for a typical residential customer of $32.23 per year.
If approved, monthly bills would increase from a projected $69.49 to $72.18 a month.
According to National Fuel, which serves 250,000 customers in western Pennsylvania, the primary reason for the increase is that the cost of natural gas is projected to be slightly higher.
According to the U.S. Energy Information Administration, there are three main factors that affect natural gas prices; the amount of gas production, the amount of gas in storage and the volume of gas imports and exports.
It seems likely that sustained low prices, a product of increased gas production in the Marcellus and Utica shale formations, has led to the slight increase.
In October, David Bauer, CEO of Buffalo-based National Fuel Gas Co., said the industry was drilling fewer wells because of lower prices. That could reduce the supply of gas or at least reduce the growth of the supply.
National Fuel’s price projection is just a prediction and could change with market conditions.
Jim Martin can be reached at 870-1668 or by email. Follow him on Twitter at www.twitter.com/ETNMartin.