Piedmont Natural Gas has proposed a cut that could save residents in the Carolinas a little bit a month on their average monthly bill.
The proposal to slash the price for natural gas users by 50 cents per dekatherm would offset the rate increase the energy provider is seeking from the North Carolina Utilities Commission and reduce the 2017 increase in South Carolina, the Charlotte Business Journal reports.
While the cost of gas varies, utility companies charge customers essentially the amount they buy the gas for as well as the method through which the customer gets the gas. The former is the primary way the utility company makes profits. While the company is not allowed to profit off the resale of gas, they do profit off of providing the utility to the customer. According to the Charlotte Business Journal, these charges consist of upgrading equipment and lines, maintenance, expansion and operation.
"The actual cost of the gas varies constantly on the open market," according to the Charlotte Business Journal. "Each utility sets the benchmark price to, as accurately as it can, reflect the commodity cost over periods of time. The utility can increase the benchmark price when natural gas costs rise, and it's required to reduce the price when costs fall."
Piedmont's price cut would decrease the benchmark price from $2.25 per dekatherm and has also proposed a reduced rate for general costs based off usage rates. This combination could save North Carolina customers about 65 cents.
The petitions to lower benchmark prices in both North and South Carolina were approved. According to the Charlotte Business Journal, these proposals are subject to approval as long as the gas company, in this case Piedmont Natural Gas which is a subsidiary of Duke Energy Corp., can prove that the cut or hike is "reasonable and based on changes in the market price."