Originally created 12/30/98

Gas-cost increase puzzling



SAVANNAH -- Gas deregulation promised to bring competitive pricing and lower bills to Georgia consumers, but many homeowners and businesses are confused and angry about pricey bills in the holiday mail.

Atlanta Gas Light Co., phasing out as the state's sole natural gas provider, has been answering phone calls 24 hours a day. The state utility Public Service Commission also has been swamped with inquiries.

"It began two weeks ago," said Shawn Davis, a spokesman for the commission. "We've probably had thousands of calls."

The company defends the increases as business costs. But at least one state legislator isn't so sure.

"Atlanta Gas is profiteering off of the unregulated system," said state Sen. Eric Johnson, R-Savannah, who sits on the state Finance and Public Utilities Committee.

Sen. Johnson wants the commission to investigate the sudden increases. That could begin as soon as Jan. 5, the commission's next meeting.

If the commission takes action, consumers could see relief as early as March 1, Mr. Davis said.

It isn't the first time that consumers have been hit with higher gas rates from Atlanta Gas. In July, the company tacked on a base delivery charge, which was levied as an annual fee instead of being spread out over 12 months. The company was eventually forced to roll back $21 million in delivery charges.

The fees caught Savannah resident Allen Mitchell off guard. His most recent bill of $40 was a shocker, especially since he didn't use much gas in the summer.

"I had $1.50 in gas charges and $20 in other fees," said Mr. Mitchell. "For me, August was more of a surprise than December."

The most recent fees, which were levied in November and appear on this month's bill, are based on typical natural gas usage and are spread out over five months.

Augusta resident Mary Baggs said her bill for November more than doubled from the previous month.

"My bill should be about $26 based on the `per therm' rates from last year. Now it's $62," she said. "I feel like I've been held up without a gun."

But other customers noticed bill totals doubling or tripling last month.

"I've had probably four or five calls this last week with people saying their bills took a substantial jump," said Tommy Brunson, owner of Brunson Heating and Air in Savannah.

Mr. Johnson said the increases were suspicious because Atlanta Gas won't be selling gas in the future. But he believes deregulation will eventually resolve itself.

Representatives from Atlanta Gas defended the new fixed rates, and said the charges are designed to collect costs the company incurs from its delivery suppliers. The new rate structure "unbundles" fixed costs that were previously not noticed by consumers.

"With the extremely warm temperatures we've experienced this fall, the timing couldn't have been worse for unbundling," said Paula Rosput, president and chief operating officer of Atlanta Gas. "If the weather had been colder than normal, the average customer would have noticed a lower cost per unit of natural gas than last year."

Since competition began in October, Atlanta Gas has charged both an unregulated price to recover the cost of natural gas supplies and for the cost of reservation fees that insure the delivery of natural gas supplies to Georgia from interstate pipeline transmission companies.

Ms. Rosput said the rates are based on covering costs that the company will experience whether it is warm or cold.

"There is no basis for the suggestion that we are marking up the costs."

But Mike Wrath of Savannah remembers a time when, if he didn't use any gas, he wasn't charged a monthly hook-up fee at all.

His December bill represented a $3.35 increase over November.

"I paid $19.88 for using no gas," Mr. Wrath said. "We're just victims of vultures out there to pick your pocket."

Other area legislators are bracing for calls.