ONG announces increase in natural gas prices

Oklahoma Natural Gas Co., the state' largest natural gas utility, has upped the price it charges customers for natural gas by a record 53 percent to its highest level ever, the company said Monday.

Citing increased market prices worldwide, ONG raised its gas prices from $5.15 per thousand cubic feet to $7.88 per thousand cubic feet -- an increase of $2.73. A year ago, ONG charged $3.10 per thousand cubic feet.

Bill Eliason, ONG's vice president for gas strategy, said high demand and low supply have driven prices to "levels that our customers have never seen before."

"It's a situation we've all been concerned about and one we've attempted to communicate to our customers for months now," Eliason said.

ONG makes no profit on its sale of gas, allowed only to recover from customers the amount it spends on buying the gas.

Instead, the company makes its money on the prices it charges for delivering the gas, which are regulated by the Oklahoma Corporation Commission and have not increased since 1995.

During the company's most recent billing period, which included the higher gas prices, the gas price amounted to about 85 percent of an average customer's bill of $208.59, ONG spokesman Don Sherry said Monday. The rest of the bill consisted of the transportation cost and other various fees.

Matt Skinner, a spokesman for the Corporation Commission, said such increases are industrywide and are pinching customers across the nation, including those of other utilities in the state. ONG serves about 800,000 Oklahomans -- far more than any other natural gas utility, Sherry said.

"I would say categorically that almost every major gas utility is either going ahead with huge increases if their system allows it, or asking for huge increases because of the way natural gas prices have been skyrocketing," Sherry said.

The 53 percent gas price increase announced Monday was much bigger than ONG's previous highest rate increase.

Last June, the price ONG charged for gas went from $3.10 to $4 -- an increase of 29 percent. In December of 2000, the price increased 28.75 percent, from $4 to $5.15.

Sherry said while there hasn't been a decrease in natural gas prices since December 1998, he expected the price to come down some once winter is over.

"I think most people in the industry do see a moderation of prices this spring, predicated by the warmer weather and greater supply spurred by increased production," he said. "I don't think there's a question that prices will go down. The question is how much."

The Corporation Commission has scheduled a Tuesday news conference to review the impact of the higher natural gas prices and what might be done to help alleviate some of the problems associated with the higher costs.

But Sherry said, for now, the situation is hard for both natural gas utilities and customers. He encouraged customers who thought they might have problems paying their bills to call the company, adding that a financing plan may be available to certain people.

"It's difficult for us from the standpoint of our customers,"

Sherry said. "We genuinely do care about them and this higher level of gas prices is going to represent a challenge to our customers. We're painfully aware of that."