Wednesday, April 4, 2012

Epilogue on "Tiered" Natural Gas Rates

Longtime readers will recall a series of posts last year on the subject of "inverted" block rates, or "tiered" rates for natural gas.

A quick recap, under "tiered" rates, the more natural gas you used, the higher the price you paid.  Of course, if you use more you pay more, but this system is more like charging a Prius driver $2/gallon for gasoline, while charging an SUV owner $5 per gallon.

A natural gas utility tried out the concept but was ordered by our state's utilities commission to drop the program, after a storm of protest.  Now it turns out that the utility has to refund some of the money it collected from customers who were innocent.

In calculating the penalty price, each user's natural gas monthly consumption was compared to the "average" user.  Above average users paid a higher price, below average users got a discount.

But wait.  It was discovered that some gas customers got bumped into the higher price bracket because the utility calculated usage based on a 32-day month, in some cases higher than 40-day "months."  Yes, your gas usage will look high if the utility counts 40 days of your usage and compares your figure to 31 days for an average user.

Unbelievable.

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