Private vs. municipal gas operations questioned|[1/27/06]
Published 12:00 am Friday, January 27, 2006
With the jumps in natural gas prices for Vicksburg residents that began in October and have continued through January, residents have questioned whether the city-owned utility is doing enough to counter the surge.
That question and others were repeated at a community meeting called by District 3 County Supervisor Charles Selmon Thursday at the Warren County Chancery Court. About 50 people gathered to discuss high utility costs.
“If you add your electricity and gas you’re paying a thousand dollars a month,” said one woman.
Vicksburg is one of the largest cities in the state to still have municipal gas distribution. The larger cities of Jackson, Hattiesburg and Tupelo have private companies for gas distribution. The cities of Utica, Corinth, Liberty, New Albany, Waveland and Olive Branch, all smaller than Vicksburg, are among the approximately 32 towns and cities in Mississippi that still own systems, according to the Mississippi Public Service Commission Web site.
Gas in Clinton is run by Atmos Energy, the company that also handles gas in Tupelo and Jackson. Atmos’ rates for 2005 were higher than Vicksburg’s. However, because the city more than doubled its rate for this month, January bills for Vicksburg residents will be larger per unit than residents in Clinton.
City officials have cited a large increase in the cost of purchasing gas as the reason for the spike in costs passed on to the consumer. Both Atmos and Mississippi River Gas LLC, which covers the Port Gibson area and a portion of Warren County, both said they increased their rates for the same reason.
In October, Atmos passed on an increase of 20 percent to its customers. In November, Mississippi River Gas reported a 57 percent increase from its October rate.
Cyndi Bush, general manager of Mississippi River Gas, said the rate increase in October was the first for her company in 14 years.
“We can only go to the Public Service Commission every three to four years to ask for a rate increase,” Bush said.
The Public Service Commission regulates private telecommunications, electric, gas, water and sewer utilities. According to the commission’s Web site, the agency is charged with assuring that rates and charges for services are just and reasonable, that the service rendered is reasonably adequate, and that any facilities are required for the convenience and necessity of the public.
Bush said only companies are regulated by the public service commission, not municipalities. She said this can be an advantage for the consumer.
“There is a watch dog on us and I’m audited every year,” Bush said.
Although monthly bills are generally higher with a private company than a municipality, Bush said private companies offer special services like budget billing and partial payment.
“What the budget billing does is takes a full 12 months and divides it up,” Bush said.
Mayor Laurence Leyens said there is still no doubt that having municipal-run gas distribution is better for residents.
“We’re not in the business of making a profit,” Leyens said. “There’s not an incentive for a company to get the best rate for its customers. They make money with their fees.”
Leyens said the city is obligated to find the best rate for its residents and works every day to do so.
Paul Rogers, strategic planner for the city, said he is not sure when gas prices will go down, but he thinks February prices could be lower. Rogers said there are several factors that affect the price of gas. He said there are still gas pipelines that are not back up and running since they were damaged by Hurricane Katrina in August. He also said the price of gas during the winter is calculated according to the temperatures in the northeast part of the country. Even though it may be a fairly warm winter in the South, if it is cold in the northeast gas prices will reflect that, he said.