Aug. 1--MERCER COUNTY -- What a difference a year makes.

National Fuel Gas Distribution Corp. announced Friday it was whacking its rates 28.5 percent due to plunging natural gas prices, effective today.

For a typical NFG customer it means their monthly bill will fall to $83.74 compared to $117.16. NFG's announcement was part of its annual adjustment on the price it charges for gas.

"This decrease is the direct result of a continuing decline in the market price of natural gas," said Nancy Taylor, an NFG spokeswoman. However, Ms. Taylor noted, that NFG has no control over the price of natural gas and it can change at any time.

Natural gas prices have fallen sharply from a year ago. The NYMEX July contract for gas was $3.949 per thousand cubic feet compared to $13.105 from a year ago, a difference of nearly 70 percent.

NFG's latest rates are now charging customers $8.97 per thousand cubic feet of gas. The reason there is such a wide spread between that and the market price is that NFG buys gas through contracts of varying lengths of time to avoid wild swings in the market and replenish storage supplies when needed.

The company's longer term contracts carrying a higher price tag are gradually expiring but remaining ones are still more expensive than current costs, Ms. Taylor said.

As a result, she said, gas costs passed on to customers will never match the spot market price of gas. By law, a utility isn't allowed to earn a profit on the price it charges for gas.

Utility's are allowed to adjust their gas charges quarterly to reflect changing market conditions. NFG's next quarterly change is scheduled for Nov. 1.

NFG serves about 214,000 customers in 14 northwestern Pennsylvania counties including Mercer County.

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