Natural-gas rates may fall 17%

If you use natural gas to heat your house, you're in for a pleasant surprise: With prices dropping and an ample supply available, Puget Sound Energy is seeking to cut natural-gas rates by 17 percent this fall.

The utility filed a request Monday with the state Utilities and Transportation Commission to decrease rates. If approved, a typical household would see the average monthly gas bill drop by about $14.88, to $78.30, starting in October.

The rate drop would bring the price down to about what PSE customers were paying in 2005.

The price drop is due, in part, to the sluggish economy, because demand from industrial users is down, said David Mills, director of energy supply and planning for PSE.

At the same time, there have been some major finds recently in shale gas supplies, including discoveries in British Columbia, Pennsylvania and upstate New York, Mills said.

With prices so low — they're running about $2.50 for 1 million BTUs on the wholesale market, compared to $14 for 1 million BTUs a year ago — the utility was able to buy up a lot of natural gas at a good price and then store it for the season at underground facilities in Chehalis and in the Rocky Mountains, Mills said.

About 42 percent of housing units in the Puget Sound area are heated with natural gas. An additional 48 percent rely on electricity.

Even though PSE is requesting a decrease in natural-gas rates, the utility also has a separate, and unrelated, request pending before the utilities commission that would increase rates next year. The general rate increase was filed by the company in May, and would go into effect in April 2010.

That rate increase, which seeks to recover investments made in the company's energy-system infrastructure, would raise natural-gas rates by 2.5 percent, and electric rates by 7.4 percent.

The utilities commission has three public hearings scheduled for the rate increase, including a Dec. 10 hearing in the Lake Washington Technical College auditorium in Kirkland at 6 p.m.

Katherine Long: 206-464-2219 or klong@seattletimes.com