Richmond residents, businesses to see drop in gas bills

About 110,000 Richmond-area households and businesses will see gas bills drop by an average 11 percent beginning next month.

Wholesale prices for natural gas have remained low after sliding late last year, and the city's Department of Public Utilities is cutting its charges for customers as a result.

The cuts will bring a typical homeowner's monthly gas bill down to $91.75 from $102.95. The figure is for someone using 7,000 square feet of gas each month, a typical amount for residential customers under the department's 12-month budget plan, which averages low usage during the summer and higher usage in the winter.

The gap between what the city charges and wholesale prices on the New York Mercantile Exchange still remains fairly high compared with where it stood before last year's price slide. Gas prices, however, often spike in the fall and winter.

The city also provides gas to some customers in Henrico, Hanover and Chesterfield counties.

Columbia Gas of Virginia, which serves about 60,000 customers in Chesterfield County and the Tri-Cities area, increased its gas bills 7.5 percent last month. Columbia, which also provides gas to Goochland County customers, adjusts its charges for gas quarterly, while the city utilities department changes its less often.

The city previously cut its charges in February, when the gap between them and wholesale prices reached the highest level seen in at least five years.

"The fact that natural gas bills will continue to go down for our customers is good news I'm happy to bring during this turbulent economic time," said Mayor Dwight C. Jones.

Gas bills have two main elements: a charge for delivering gas, which doesn't change, and a charge for the gas a customer burns, which is pegged to wholesale prices and is supposed to move, dollar for dollar, with those prices.

That charge, which is called the "purchased gas cost," is dropping from 89.5 cents per 100 cubic feet to 73.5 cents. It hasn't been as low since the summer of 2006.

Contact David Ress at (804) 649-6051 or dress @timesdispatch.com.