Len Mize
Corporate Communications
(303) 243-3430
Natalie Shelbourn
Business Relations
970-874-4432 x225
www.sourcegas.com
SOURCEGAS SEEKS FIRST UTILITY BASE RATE INCREASE IN
ARKANSAS VALLEY IN MORE THAN 18 YEARS
LAKEWOOD, Colo., March 4, 2008 – SourceGas Distribution LLC (SourceGas) today
announced it has filed a request with the Colorado Public Utilities Commission (CPUC) to
increase the non-gas component of its rates to cover the increased costs associated with
providing natural gas service to approximately 85,000 customers across Colorado. The last
increase in the non-gas base rates for the Arkansas Valley service area, which covers items such
as infrastructure, equipment, labor, materials, billing, and safety services, was in 1990.
“We have been able to maintain the distribution rates for our customers for many years
and make service improvements by effectively managing the business and our costs,” said Dan
Watson, president and CEO of SourceGas. Watson added that the improvements made to the
system, which include the implementation of a mobile dispatch system, automated meter reading
and a centralized call center have helped keep costs in check for customers. “A thorough
analysis, however, has demonstrated that we cannot continue to absorb these higher costs and
must adjust our rates in order to keep pace.”
The non-gas component of a monthly bill includes a fixed customer monthly charge and a
volumetric charge, which varies from month-to-month depending on the amount of gas used.
SourceGas proposes a higher fixed monthly customer charge and a higher volumetric charge.
The request does not affect the largest portion of a customer’s bill, the natural gas commodity
costs, which are based on market prices and currently account for 70 to 80 percent of the total
monthly bill.
(more)
SourceGas – Colorado rate filing
Page 2
A typical residential customer who currently uses 809 CCF’s annually will see an
increase in their average monthly bill of approximately $14.41, or 28.11 percent, while a typical
commercial customer using 2,234 CCF’s annually will see an increase in their average monthly
bill of approximately $27.43, or 11.58 percent.
Watson explained, “Shifting these non-gas costs away from the portion of the bill that is
subject to fluctuations will help stabilize customer bills, reduce the impact of winter heating bills
by spreading more of our cost recovery over a full year and lessen the impact of the volatile
commodity prices we’ve seen recently.” Watson added that SourceGas has the opportunity to
earn a rate of return that is established and monitored by the CPUC as compensation for its
investment in the pipelines and infrastructure that deliver natural gas safely, reliably and
efficiently.
The company proposes that the filed rates will become effective April 4, 2008. However,
this request is subject to suspension by the Colorado Public Utilities Commission while the filing
is being reviewed. Additional information is available online at
http://www.sourcegas.com/CO.aspx
SourceGas is a natural gas local distribution utility headquartered in Lakewood,
Colorado, with operations in Colorado, Nebraska, Wyoming and Hermosillo, Mexico. It serves
nearly 266,000 customers and operates 11,900 miles of distribution and transmission pipeline, as
well as storage facilities. SourceGas and its subsidiaries also provide gas transportation, in-home
HVAC and appliance service and sales, as well as gas commodity sales services to its natural gas
customers.
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"SourceGas is not making any representation or warranty, expressed or implied, as to the
accuracy, reliability or completeness of the information in this press release, and neither
SourceGas nor any of its directors, officers or employees will have any liability to any person
resulting from the use of or reliance on any information contained in this press release. Any
SourceGas offer or promotion contained herein, if any, is subject to specific terms and
conditions, including eligibility rules, all of which are subject to change.
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