County: Gas Rate Updated Under New Ordinance


The rate Los Alamos utility customers will pay for April gas usage under the natural gas rate ordinance adopted last week by the Los Alamos County Council has been calculated and released. While the allowable rate cap was increased under the new ordinance, the April rate remains below the previous cap and below the March natural gas rate.

From April 8 through May 7, residential and commercial customers of the Los Alamos Department of Public Utilities (DPU) will pay $0.96/therm for natural gas. This rate includes the following per-therm components: the fixed consumption rate of $0.25 that covers operating costs, the variable rate of $0.27 that covers the actual cost of gas that is passed through to customers, and the new $0.44 sunset recovery rate.

The variable portion of DPU’s natural gas rate is updated on the 8th of each month based on San Juan Index pricing. In March, the variable portion of the gas rate was $0.99/therm (the cap) plus the fixed portion of $0.25/therm for a total of $1.24/therm.

“Historically, this pass-through component provided relatively stable pricing for DPU’s customers,” said DPU Utilities Manager Philo Shelton. “In the past 12 to 18 months, unprecedented volatility of market prices disrupted the stability of our rate. DPU’s cost to obtain the commodity exceeded the amount the department was able to recover for providing natural gas to customers.”

The ensuing shortfall prompted the adoption of a new gas rate ordinance in March. Under this ordinance, customers will see a sunset recovery rate component that allows DPU to recover actual costs incurred that were beyond the allowable charge under the previous rate ordinance. This new component equals $0.44/therm and will be charged until the previously unrecovered costs are collected, or up to two years, whichever comes first.

Additionally, customers may see an increase to the variable rate cap and a compensatory minimum value for the variable portion of the gas rate. All previous pass-through gas rate ordinances have capped the variable portion of the rate at $0.99/therm. This cap is now set at $4.00/therm. The minimum charge for the pass-through portion of the rate, a requirement under the County Charter, is now set at $0.11/therm and is intended to soften any month-to-month rate swings caused by volatile commodity costs.

“We’re pleased that all components of our natural gas rate together are below last month’s rate,” Shelton said. “We hope we never come close to the newly adopted cap for the variable portion of the rate. As a community-owned utility, DPU’s staff members are customers too and we go through the same sticker shock as everyone else when rates are high.”

In response to high gas bills over the past few months, DPU management encourages customers to participate in the Budget Billing program where monthly bills are levelized to prevent large seasonal fluctuations that are often caused by winter heating and summer irrigation. More information on that program can be found at .

The gas rate schedule and calculation are posted monthly on DPU’s website at .