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Heating costs swell
Henrietta, N.Y. -- You must have noticed it by now, an increasingly high heat bill. While the supply of natural gas has been high in recent years, the price paid by customers of Rochester Gas and Electric has risen steadily over the past three years. An RG&E spokesperson said the heating bill has many layers which include taxes. The main components are the cost of gas and delivery chargewhat RG&E uses for overhead and revenue.
Rates for the delivery charge are determined years in advance. Those numbers have risen, on average, by 7.4 percent since 2010.
Im on the budget plan and the bill did go up about ten bucks from last year to this year, said Henry Sauer of Henrietta.
Delivery rates are approved through the State Public Service Commission. On 13WHAMs Facebook page, numerous viewers complained of sky-high rates paid for their gas bill.
Its the delivery charges that are killing me, wrote one viewer.
In 2012, a typical RG&E gas customer paid approximately 57% or $48 for the gas and 43% for the delivery, according to Dan Hucko, RG&E Spokesman.
On December 31, 2013 the rate plan used by RG&E for delivery charges expired.
We do have the opportunity to renegotiate our rates, said Hucko. The company has not decided whether rates will change or stay flat, Hucko added.
Natural gas prices are on the rise. A report by Bloomberg said the price of natural gas has surged to the highest level in two years because of forecasts for colder-than-normal winter and lighter inventories.
Three-year rate setting horizons are probably palatable in light of consumer desires to prevent too rapid a fly-up in rates when energy costs are rising, yet they do lock in higher and perhaps even rising rates as in the present case when costs are actually declining, said Mark Zupan, Dean of the Simon Business School.
What gas is worth per unit at the wellhead does not take into account the costs of handling, transporting, and distributing it. In addition, state law allows for gas utilities (like RG&E) to earn a profit, which must be added, for their time effort and capital in getting that gas to your stove or furnace, said George Conboy, President of Brighton Securities.
RG&Es Residential bills are among the states lowest, according to Hucko.