Richmond reduces charge for natural gas
Jeremy M. Lazarus | 8/18/2022, 6 p.m.
The cost that Richmond customers must pay for natural gas is coming down, for now.
The Richmond Department of Public Utilities this month quietly reduced the purchase charge (pgc) to customers for the purchase of the fuel by nearly 20 percent.
DPU did not publicly announce the change but noted the reduction on the August bills.
For August, DPU reduced the charge to 92 cents per 100 cubic feet as the purchase price the department pays retreated, just as it has done for gasoline.
In July, DPU jumped the charge from 57 cents per 100 cubic feet to $1.136 per 100 cubic feet to reflect the spike in the price of the gas it purchases and brings to Richmond. (A ccf or 100 cubic foot of natural gas equals 748 gallons.)
Compared to a gallon of gasoline that is now costing Richmond drivers between $3.65 and $3.80 a gallon, natural gas is extremely inexpensive.
In July, the DPU hike meant the equivalent cost of one gallon of natural gas was .0015 of a cent—or about one sixth of one penny.
DPU’s reduction means the equivalent gallon price of natural gas has fallen to .0012 of a cent or about one eighth of one penny. That is nearly double the pre-July charge when the pgc was set at 57 cents per 100 cubic feet.
Though inexpensive, natural gas’s pgc cost has an impact on customers as they use a lot of natural gas.
DPU estimates that the average residential customer uses 70 ccf a month over the course of a year, with more in winter and less in summer, or 7,000 cubic feet a month.
That is the equivalent of 52,360 gallons of natural gas, based on 7.48 gallons per cubic foot.
Based on an average of 70 ccf per month, a residential customer would face an average monthly pgc charge of $78.54 when the pgc is $1.136 per 100 cubic feet; of $62.80 when the pgc is 92 cents per 100 cubic feet; and of $36.65 when the pgc is 57 cents per 100 cubic feet.
DPU is allowed to impose the pgc on customers to recover the cost it pays to buy and transport the fuel to Richmond. The pgc is separate from other charges DPU imposes, including a charge to cover the cost of piping the gas to individual homes and businesses within the city
April Bingham, department director, announced in July as the price surged that DPU would more closely monitor the natural gas market and make changes monthly as needed rather than doing so every three months.