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Critics say National Fuel rate hike would hurt poorest customers

Gary Cutright still is trying to pay off his heating bills from last winter, and he's worried about how he'll afford those bills this winter, especially with National Fuel Gas Co. seeking a 15 percent increase in its delivery charges.

"It's still a little bit steep for us," the Buffalo resident said Wednesday during a hearing on the Amherst energy company's proposal to increase its delivery rates.

All of the more than a dozen speakers who spoke during the hearing in the Buffalo and Erie County Public Library in downtown Buffalo opposed the $41.7 million rate increase.

Several speakers, like Cutright, said the higher rates, which would increase a typical customer's monthly bill by about $5.75 per month, from about $80 to $86 would be especially hard on low-income consumers.

Karen L. Merkel, a National Fuel spokeswoman, said more than 91,000 of the company's heating customers received some type of heating aid last winter. And lower natural gas commodity prices have led to a steep drop in winter heating costs over the past five years, with heating bills expected to average just under $500 from November through March.

That was small consolation to Cutright, who said he doesn't receive any heating assistance because his income is a little bit too high to qualify.

"Think about the thousands of low-income people who live just over the assistance line," he said.

The proposed rate increase, made by the company in April, would be the first increase in National Fuel’s delivery charges in nine years. If approved by the state Public Service Commission, which can modify the proposal, the new rates would take effect in the spring. The company also began holding discussions with parties involved in the rate case to try to reach an unofficial settlement that could be submitted to the commission for consideration.

Because delivery charges make up only about half of a customer’s total bill, the overall impact of the proposed rate increase would be to increase the average residential customer’s total bill by about 7.2 percent, or $69, a year.

The proposed increase, which would take effect in April 2017, affects only the rates National Fuel charges to deliver natural gas to their customers’ homes and businesses. Roughly half of a typical customer’s bill covers the actual cost of the natural gas, which National Fuel passes on to consumers at cost.

Sara Schultz of Williamsville said National Fuel is seeking the rate increase at a time when its profits are rising, the dividends it pays to shareholders are increasing and its chief executive officer, Ronald Tanski, is earning just under $7 million a year.

"How much money is enough?" she asked.

Because the proposed increase would raise the minimum service charge each National Fuel customer must pay by 27 percent to $19.66 a month, regardless of how much gas is used, Robert Ciesielski, a Buffalo resident and Sierra Club volunteer, said proposed rates would hurt consumers who use the least amount of energy the most.

Low income customers can spend upwards of 40 percent of their incomes on home heating, said Lynda Scheekloth of the Western New York Environmental Alliance. The higher rates, she said, "can sometimes mean the choice between heating your home and putting food on your table."

Scheekloth also criticized National Fuel's proposal to expand its residential service into some rural areas, saying it would encourage the use of fossil fuels at a time when concern is growing over global warming and greenhouse gas emissions.

Merkel said National Fuel is proposing the service expansion because many rural residents now are paying much higher heating bills because they use oil, propane or electricity to heat their homes, all of which are more expensive than natural gas.

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