Big gas rate hike possible in city

Published 12:00 am Tuesday, December 26, 2000

With natural gas prices skyrocketing all over the nation, Vicksburg’s gas department is taking some heavy financial hits, and a major rate increase could be in the works.

“Some gas bills are going to be higher because we’re paying more for gas,” said Mayor Robert Walker. “It’s something we have no control over.”

Many Vicksburg gas customers got an early Christmas present they didn’t want in the form of higher than expected gas bills for December.

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That’s because a rate cut, passed last October to offset water and sewer rate increases, expired automatically on Dec. 1.

The rate cut lopped $1.55 off the charge to customers for each 1,000 cubic feet of gas. Customers will find their bills higher due to rates reverting to 1999 levels.

But that won’t be nearly enough to make ends meet if prices keep soaring, said Tim Smith, administrative assistant to the city clerk. The city spent $272,059 on gas last December. This month, the figure is looking more like $1 million, and prices are continuing to rise.

Natural gas prices have more than doubled in the past year, leading to rate hikes across the country. The City of Vicksburg, which paid $1.98 per 1000 cubic feet of gas in December 1999, had to cough up $5.86 for the same amount of gas this month. Prices for January are expected to be close to $10. But so far, that cost hasn’t been passed on to the city’s gas customers.

The gas department, which ran annual surpluses for years, has about $5 million in the bank, not counting $875,500 in cash reserves already budgeted to help fund the department’s operations this year.

That means a budget amendment to authorize dipping deeper into the gas fund reserves may be possible to temporarily delay a rate increase. But if a rate increase comes after the cold season, when the majority of the year’s gas is used, it may be too late to make a major impact.

“I’m open to looking at it and maybe using some reserves to make the impact less on people,” Walker said. “It would be unconscionable to do nothing.”

Walker said the board will be prepared to act on the situation after the holidays.