Piedmont Natural Gas shut-offs surge as others fall
Piedmont Natural Gas shut-offs have surged around Charlotte and the state in the cold-weather months, as some consumers struggle with deciding what bills they can pay in a deteriorating economy.
From November through February, shut-offs in the Charlotte region increased by 86 percent compared with the same time a year ago, an Observer analysis of state data shows. The utility's shut-off rate also increased statewide, even as other utilities' rates for shut-offs dropped statewide.
State officials say Piedmont, which is the dominant gas provider in Charlotte and the state, is doing nothing wrong in its shut-off procedures. And company officials say that they believe the increase is due both to the economy and to internal changes that delayed some cutoffs until last fall. They also say that overall, shut-offs declined slightly last year.
"We are very concerned for our customers," said June Moore, Piedmont's customer service vice president. "We hate to do (shut-offs) but sometimes it becomes necessary."
Interviewed at Charlotte's Crisis Assistance Ministry, which provides emergency financial assistance for people facing eviction or utility loss, several clients said their gas bill is the last one they pay, and they were having a tough time dealing with big gas bills.
Kiesha Lastrapes, who is unemployed and lives with her 8-year-old daughter in east Charlotte, recently avoided getting her gas turned off because of help from the ministry.
"This month I'm struggling," she said. "I'll pay the rent first because I worry about my daughter" and being able to stay in their home.
Lastrapes didn't understand why her gas bill was so high, at $257 over two months.
"(Piedmont) acts like they are the only ones I have to pay. I have to pay rent, food, electricity. It's not fair," she said.
After rent, Lastrapes said she pays the electric bill because she can use an electric heater if she needs to.
"People will use their stove or kerosene for heat. It's not what we like to hear but that's the reality," said Doug Hartjes, the ministry's development officer. "People are making these very, very difficult choices on a daily basis."
Because of the economy's impact on customers, Piedmont spokesman Loree Elswick said, the company put a customer-service representative at Crisis Ministry for the first time last year. The worker assisted about 1,150 people in November and December.
Piedmont is the state's dominant natural gas provider and the Charlotte company is the only utility that voluntarily details monthly disconnects by region with the N.C. Utilities Commission.
While Piedmont's shutoffs grew, other utilities saw declines from November through February, when compared with a year earlier. Duke Energy's rate fell 7 percent and gas company PSNC Energy dropped 43 percent.
Several factors might explain why Piedmont's spiked as PSNC's plummeted, state and company officials said.
PSNC, the state's other major gas company, decided last fall to be more flexible when disconnecting customers behind on their bills, spokeswoman Jodie Roberts-Smith said. That new process is similar to what Piedmont already does, state officials said. PSNC also added a second reminder to customers about spreading out their bills evenly through the year, Roberts-Smith said.
It's also possible that the utilities' customers are feeling the economic pinch differently. Unemployment around the Raleigh area, PSNC's largest metro region, was 7.9 percent in January, while the rate in the Charlotte area, Piedmont's biggest metro area, was nearly 3 points higher, at 10.5 percent.
Jeff Davis, natural gas division director at the state's consumer advocacy agency, said Piedmont is following proper procedures and was not being overly aggressive. "I think you are just seeing some fallout from what is happening in the economy," Davis said.
Piedmont wants to work with customers to avoid turning off service, Elswick said.
"Certainly we recognize in this economy, people have new pressures, and people are struggling to pay their bills," Elswick said. "The biggest thing we need to do is get the message out: Call us before service is disconnected."
PSNC has about 450,000 N.C. customers and Piedmont has 671,000, including about 275,000 in the Charlotte area. Piedmont's N.C. customer base grew by about 2 percent last year, N.C. records show.
Piedmont handled 2,910 shut-offs in the Charlotte area in the past four months. Statewide during that time, Piedmont made 9,039 disconnects, a 68 percent increase from the same time the year before. PSNC disconnected 5,592 customers from November through February, a 43 percent decrease.
Last Monday, Casandra Watson arrived at Crisis Ministry at 5:30 a.m. to avoid getting her gas turned off. She was laid off last November from her job as an administrator in a health-insurance office.
Watson lives with her 11-month-old and 17-year-old children in north Charlotte. Like Lastrapes, Watson pays rent first, then the electric bill, before dealing with Piedmont.
"You have to keep a roof over your head, and you don't want to be in a home with no lights," she said. "I'm just glad my 17-year-old understands the situation with me being unemployed."
Chicago Gas Companies Disconnecting Thousands
Gas Companies Disconnecting Thousands - On the brink of the cold-weather months, more than 56,000 natural-gas customers in the Chicago area remain disconnected for lack of payment. That's up 36% from last year, putting pressure on utilities and local officials to get disconnected households back online before winter begins in earnest.
Peoples Gas and Nicor Inc. are offering new programs to help customers who are behind on their bills. In a pilot that began last month, Peoples has stopped shutting off customers as long as they pay 60% of their monthly bill. For two weeks last month, Nicor offered to reconnect customers who paid half of their outstanding debt and agreed to a payment plan for the rest. Some 1,400 took advantage of the offer.
With the souring economy making it increasingly difficult for people to pay their bills, consumer advocates say the programs are not enough.
Peoples Gas wins $17.4M military contract
Peoples Gas was awarded a $17.4 million contract by the U.S. Navy to provide energy conservation measures.
The Tampa-based utility will institute various measures at the Naval Air Station in Jacksonville, a release said.
The work is slated for completion by November 2010.
Peoples Gas already won a $900,000 contact for reducing power usage at the base by providing lighting retrofits and new equipment at water and wastewater treatment plants.
Florida Public Service Commission Votes on Peoples Gas Base Rate Increase
Moderate Increase of 10 Percent Expected for 20-Therm Residential Bill
Today, the Florida Public Service Commission (FPSC) voted to increase Peoples
Gas System`s base rates for the first time since 2003, effective June 18.
Peoples Gas will continue to collect annual interim rates of $2.38 million that
were granted in October 2008 until the time permanent rates go into effect.
President Bill Cantrell said, "Peoples Gas is committed to safe and reliable
delivery of economical, low-carbon natural gas to Florida citizens. We are
working hard to manage costs and efficiently serve our customers."
While the FPSC will vote to decide final rate structures May 19, based on
today`s vote, a residential customer using 20 therms per month could expect an
increase of about 10 percent to their total bill.
The approval for a base rate increase of $19.2 million comes after a nine-month
regulatory review of the company`s books and records, and is less than Peoples
Gas requested in its August 2008 filing.
Base rate charges, as approved in the company`s rate case, are used to cover the
utility`s cost of building, operating and maintaining the infrastructure it uses
to serve customers. The largest part of a customer`s gas bill is typically the
fuel charge, representing the cost of natural gas paid by Peoples Gas to fuel
suppliers, and is passed on to customers without any mark-up or profit to
Peoples Gas. The fuel charge is monitored and approved by the FPSC and is
adjusted periodically to reflect actual and projected costs.
Since its last base rate increase in 2003, Peoples Gas has added approximately
100,000 new customers. To serve that demand and address new federal
requirements, the company has installed or replaced more than 1,500 miles of gas
main in the more than 200 communities it serves throughout Florida.
As approved by the FPSC, Peoples Gas` new base rates reflect a return on equity
of 10.75 percent, which is the middle of a range between 9.75 percent and 11.75
percent. The allowed equity in the capital structure is 54.7 percent from all
investor sources of capital (and 48.5 percent including other regulatory sources
of capital such as deferred taxes, and customer deposits) on an allowed rate
base of $561 million. A final order addressing today`s decision and the rates
decision to be taken up by the FPSC on May 19, 2009 is expected to be issued by
the FPSC on or about June 8, 2009.
Peoples Gas System, Florida`s largest natural gas distribution company, is one
of the four core businesses of TECO Energy, Inc. (NYSE:TE), an energy-related
holding company, with regulated electric and gas utility operations in Florida
through Tampa Electric and Peoples Gas System. Peoples Gas serves approximately
335,000 customers in most of Florida`s major metropolitan areas and beyond.
Other TECO Energy subsidiaries include TECO Coal, which owns and operates coal
production facilities in Kentucky and Virginia, and TECO Guatemala, which is
engaged in electric power generation and distribution and energy-related
businesses in Guatemala.
Note: This press release contains forward-looking statements, which are subject
to the inherent uncertainties in predicting future results and conditions.
Actual results may differ materially from those forecasted. The forecasted
results are based on the company`s current expectations and assumptions, and the
company does not undertake to update that information or any other information
contained in this report, except as may be required by law.The company`s ability
to realize the benefit of base rates increases is dependent upon many factors,
including customer usage. Additional information is contained under "Risk
Factors" in TECO Energy, Inc.`s and Tampa Electric Company`s combined Annual
Report on Form 10-K for the period ended Dec. 31, 2008.
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Sources: WCNC, Charlotte Observer, Huffington Post, Chicago Tribune, Tampa Bay Biz Journal, Silobreaker, Piedmont Gas, Peoples Gas, Recovery.gov, Google Maps
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