Charlottesville weighing utilities proposal, some eyeing spike in natural gas prices

Published: May. 19, 2022 at 4:50 PM EDT
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CHARLOTTESVILLE, Va. (WVIR) - Charlottesville is feeling the impact of a hike in natural gas prices as it gets ready to set rates for utility services.

Even though it looks like there’s not much of a price increase for customers, according to a legal notice in the Daily Progress, natural gas prices could go up by more than 20%.

Chris Meyer with the Local Energy Alliance Program (LEAP) said the rise in temperatures has a part in it.

“If we have higher temperatures in the summer, it’ll be more demand for air conditioning, and thus more demand for electricity and natural gas to create that electricity,” Meyer said.

The price increase may not come as a surprise.

“This reflects, obviously, natural gas prices throughout the world also increasing because of the Russia-Ukraine war, and more demand in general,” Meyer said.

According to the city’s Finance Department, for the average customer, total utility costs are set to be about 3.1% higher in total, with natural gas prices set to be about 2% cheaper. Chris Cullinan, the director of the department, says the decrease in natural gas comes from a refund Charlottesville received from a natural gas supplier over disputed costs. Those refunds are being applied to help offset higher gas prices.

But, the city’s “purchased gas adjustment” rate is up by almost 21%, and could increase throughout the year, which Meyer says, is confusing.

He showed NBC29 his utility bill with the city: “What’s interesting in here, again, it’s not clear what these things are that shows up, how it reflects the rates that were put in the Daily Progress,” he said.

While this is currently a proposed rate change, Meyer has questions: “What will it mean for an average bill for folks? Especially for low income folks? Will there be programs that the Charlottesville gas, or the city, will be rolling out to assist them with bill payment? What does this do to city finances? Charlottesville gas is an important part of the city’s finances. It’s kind of a black box. If gas prices continue to rise like they’re expecting, will there be a subsidy? How will this impact the bottom line of the city and the budget going forward?”

Cullinan says his department is not ready to talk publicly about this as it prepares to present the ordinance to Charlottesville City Council.

Councilors are set to hold a public hearing on these possible rates June 6.

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