Due to volatility of the unregulated cost of gas at the wellhead, Marion Gas Systems rate classes will be adjusted monthly, increased or decreased, by a value called the "Purchased Gas Adjustment" or PGA. The PGA adjustment is intended to assure that MGS adjusts for these volatile changes in the wellhead cost of gas.
The "base" cost of gas is MGS's average city gate cost of gas. This includes the actual gas plus the interstate pipeline volumetric costs involved in transporting the gas from the source of supply to our city gate regulator station. This cost is established annually and will remain stable throughout our fiscal year (July 1 through June 30).
The "monthly" cost of gas is MGS's actual city gate cost of gas compared to the base cost of gas. If the monthly cost of gas exceeds the base cost of gas the amount will be an increase. If the monthly cost of gas is less than the base cost of gas, the amount will be a decrease.
The cost of gas at the wellhead, or source of supply, has been unregulated for years and is affected by free market factors such as supply, demand, and competition.
The PGA shall have no affect on the "minimum bill" charge.
MGS does not profit from the PGA adjustment. It adjusts for MGS's monthly city gate gas costs only. It does not affect operation and maintenance, fixed demand costs, or other costs incurred by the utility.
The PGA will be calculated monthly on the last business day of each month to be applied to the first billing that follows.
Effective Date: The "Purchased Gas Adjustment" shall be effective on bills render on or after ___________________ .
For more details on the Purchased Gas Adjustment, please contact MGS at 423-837-7164.
