City Council approves gas rate changes
Plan restructures rates for first time in 12 years
CLARKSVILLE, Tenn. – The Clarksville City Council approved Thursday an ordinance that restructures how Clarksville Gas & Water natural gas charges are calculated.
The changes will result in an estimated $4 monthly increase on the average residential gas bill, but it also provides potential gas-rate savings for customers who are consistent, heavy users of natural gas. Overall, the rate restructuring will increase gas revenues by 2.8 percent per year, and will affect all of the system’s 26,000 metered ratepayers.
The new gas rates will go into effect Feb. 5, and will be reflected on customer’s bills thereafter.
The new rate structure consists of a fixed Monthly Meter Charge, a fixed Usage Charge and a Commodity Charge that will vary based on the actual cost of gas the city pays its supplier. The former rate structure had rates that varied according to usage thresholds.
The City’s gas utility has not changed its rates for 12 years, and officials said this update is needed to cover the increasing actual fixed costs of operating the system and to lessen the impact of weather variations on the current rate structure.
The changes are the result of a comprehensive analysis of the Clarksville Gas & Water Department’s cost of service and gas rates by Raftelis Financial Consultants, a national leader in gas utility rate management. The new rates reflect industry best practices for natural gas utilities, the ordinance says.
A new rate chart provided by Gas & Water shows that a residential gas customer inside the City Limits with average usage (21,500 cubic feet of natural gas a year) would pay a basic bill of $12.92 during July, but would pay $33.82 in a peak-use winter month of March, with an annual total of $238.21. In contrast, under the former rates, that same customer pays $7.12 in July, but $36.46 in March, for an annual total of $189.55.
As with the former rate structure, customers outside the City Limits will pay higher rates for natural gas. The new rate chart shows that a residential gas customer outside the City Limits with average usage would pay a basic bill of $18.97 during July, and would pay $44.59 in a peak-use winter month of March, with an annual total of $331.95. In contrast, under the former rate, that same customer pays $7.72 in July, but $58.15 in March, for an annual total of $278.70.
The new structure also applies to commercial and industrial natural gas customers, but has less variability in those rate classifications, which are less prone to weather-related usage variations.