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Residents say National Fuel would hurt poor with rate hike Utility is seeking a 6.4% increase

Althea Davis of Buffalo turned to the Bible for ammunition against the utility company's plan to raise gas rates next year.

"Rob not from the poor, because he is poor," she said, quoting from Proverbs.

She and other area residents railed at the proposed 6.4 percent hike on Wednesday, saying higher heating costs will burden an economically struggling region -- even while company executives bring in multimillion dollar paychecks.

Davis was one of 16 people -- including Assemblyman Sam Hoyt, D-Buffalo -- who spoke at a public hearing Wednesday about National Fuel Gas' plan to raise gas delivery charges. The delivery charge, which covers the utility's operating cost, is regulated by the state.

"Please don't allow this to happen. It would be devastating," Davis told Administrative Law Judge William Bouteiller, who conducted the hearing.

If approved by the state Public Service Commission, the boost would raise the average customer's monthly budget bill $7.96 next year, according to National Fuel.

The company seeks the increase to make up for declining sales, which are being pulled down by conservation efforts and by the region's falling population.

"It is a vicious cycle for all of us," company spokeswoman Julie Coppola Cox said. Although consumption is falling, the company still must maintain its 14,800 mile pipeline system in the region.

As part of its rate proposal, National Fuel seeks to expand incentives to conserve. That should help customers cut their overall bills, even while delivery charges rise, she said.

The delivery charge accounts for about a third of customer bills, which chiefly reflect the cost of natural gas itself. National Fuel sells the gas itself at cost.

But for a snow-belt city with a struggling economy, any increase is about as welcome as a three-foot storm. The average residential gas bill was close to $250 last January -- and topped $300 in January 2006 -- because of spiking fuel costs.

Idella Counts of Buffalo said she was faced with monthly bills of $440 last winter, after paying $7,000 in back charges to get service turned on.

"I realize I'm in an old house . . . but I know I'm not using that much gas," she said.

Several residents got ammunition from a Buffalo News story in June that examined local executives' paychecks. National Fuel's chief executive, Philip C. Ackerman, received $8.6 million in pay last year, much of it from cashing in stock options awarded by the company.

"While consumers are being squeezed harder and harder, National Fuel executives continue to reap huge paychecks and benefit packages," Hoyt said.

Cox responded that Ackerman runs a diversified energy company with five business, not just the regulated gas unit. His pay is in step with market-driven rates at peer companies, she said.

Hoyt, Cox shot back, is in position to help ratepayers himself by easing state taxes on utility bills and opening restricted areas for gas exploration, thereby increasing supplies.

The rate boost would increase the company's revenue by $52 million. The PSC is expected to act on the request early next year, possibly granting all or a portion of the request or rejecting it altogether.

National Fuel was last granted a rate increase in July 2005. That $21 million hike was about half what the company requested.

The company has reduced its work force by 34 percent since 1996 to cut operating costs. But some ratepayers took aim at that initiative.

"I think (the staff cut) must be all meter readers, because I'm not getting my meter read," said Patricia Potts, president of container recycler Harbison Brothers in Buffalo. Estimated charges don't reflect her actual usage, she said.

Her company has cut its gas use in half since 2000. But at the same time, the price of fuel has gone up 30 percent, she said, eating up much of the savings.

"I'm concerned about this increase," Potts said, "because gas is our second largest cost after labor."


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