Sep. 1--This winter's chilly weather may feel a bit warmer for Southwest Washington residents if Northwest Natural Gas Co.'s request to lower rates is approved this fall.

The Portland-based utility on Monday filed a request with the Washington Utilities and Transportation Commission to lower residential rates here by 21.5 percent, amounting to an average bill savings of $19.50 per month for 60 therms. The utility would also lower commercial rates to customers such as stores and restaurants by 22.3 percent, for an average savings of $86 per month.

The decrease comes in addition to the $4.3 million in gas rebates that NW Natural credited to Washington customers in June.

The economic slowdown and greater natural gas production out of Canada and elsewhere, along with mild weather, have been pushing natural gas prices lower this year. They are currently at a seven-year low.

Commodity prices such as those for natural gas have been falling since mid-2008, when the average price of natural gas delivered to residential consumers hit a high of more than $20 per 1,000 cubic feet. Prices fell to $13.81 per 1,000 cubic feet in June, according to the Energy Information Administration.

As a result, the utility can buy gas at a much lower cost than the record highs it faced a year ago, said Randy Friedman, NW Natural's director of gas supply. The publicly held company is required by law to pass along wholesale price changes.

The proposed Washington rate reduction is greater than the proposed residential rate reduction of 14.5 percent in Oregon, which the utility also submitted on Monday to the Oregon Public Utility Commission. That's because the new rate reductions would effectively reverse rate hikes that came last year as natural gas rates skyrocketed, said Valerie White, a NW Natural spokeswoman. Northwest Natural rates increased by 20 percent in Washington last year and by 14 percent in Oregon.

But that doesn't mean rates are stabilizing. Northwest Natural customers should continue to expect a bumpy ride as natural gas prices swing wildly with supply and demand trends.

"We're continuing to see for the past eight to nine years, that natural gas prices and energy prices are volatile," White said. "We have strategies to help level the volatility, through storage and contracts for gas supplies, so our customers don't have wild swings in their bills."

Monday's proposed rate cut is greater than the 10 percent to 15 percent rate reduction the utility estimated earlier this month. And the proposed rates are likely to change again before the final rates are approved and changes take effect on Nov. 1, White said.

The company files a final request for the rate reduction in early October, reflecting the most current gas purchases.

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