Natural gas rates will fall as temperatures rise, with rates returning to levels not seen by customers in Vicksburg for years.

City of Vicksburg natural gas price adjustments since August 2007. Price is per 1,000 cubic feet.

August 2007……….$1.76

Jan. 25, 2008……..$2.56

March 25, 2008…..$4.35

April 25, 2008……..$5.94

May 25, 2008……..$6.81

June 25, 2009…….$8.26

Aug. 25, 2008…….$4.31

Feb. 25, 2009…….$1.89

Wednesday, the Vicksburg Board of Mayor and Aldermen set new price schedules to be effective for March.

The base natural gas rate was lowered to $1.89 per 1,000 cubic feet from $4.31, which was set in August 2008. It was the second lowering of prices since June 2008, when prices hit a high of $8.26 per 1,000 cubic feet following five approved price hikes beginning in August 2007 — when natural gas cost $1.76.

“The price is coming down because the nationwide natural gas market is finally coming back down,” said Purchasing Director Tim Smith.

The lower price will mean people who used 120,000 cubic feet of natural gas this month will pay $195.74, where as the same amount of usage in March will cost $166.70, said Smith — a savings of $29.04 for the month. However, the effect will be minimized as most of the city’s 10,000 customers use the fuel for home heating and the price decrease comes as demand falls, too.

The city began using a gas price adjustment system in January 2006, after the city incurred a $4 million debt from purchasing gas due to an unexpected surge in prices. The first adjustment was set at a rate of $9.74 per 1,000 cubic feet. Before the gas price adjustment system, customers paid a flat fee based on a tiered usage structure.

Leyens has defended the city’s role in managing and adjusting the price people pay for natural gas, and credits Vicksburg as one of a small number of municipalities in the state still providing gas to residents directly as opposed to outsourcing the service to a private company. Base rates and usage fees would undoubtedly be higher if a private company were in charge of providing natural gas service, Leyens says.

The Board of Mayor and Aldermen also extended a contract with Gulf South Pipeline Company for 10 years on Wednesday. Gulf South provides transportation of natural gas through a pipeline in the city and storage of up to 100,000 cubic feet. Smith said the city spends about $57,000 in winter months for the transportation and storage of natural gas, and about $20,000 in summer months when less gas flows through the pipeline due to a reduction in usage. 

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Contact Steve Sanoski at ssanoski@vicksburgpost.com.