NCNG, a subsidiary of Progress Energy, would reduce its rates from $1.18 per therm to 95 cents per therm for residential customers. The average household uses about 800 therms a year.

In addition, as of April 1, NCNG would switch customers to its seasonal summer rate, further reducing the rate to 92 cents per therm. The total reduction would be 22 percent.

The rate reduction is following a year of extreme upward volatility in natural gas prices.

“There is no question this has been a very difficult winter,” said Don Davis, president of NCNG. “We make every effort to keep rates as low as possible, but cold temperatures and the wholesale market where we purchase our natural gas have not been very cooperative during the past year.”

Since February 2000, wholesale natural gas prices for distribution companies have increased because of a tight supply-and-demand margin. NCNG has seen its fuel costs nearly quadruple at times.

“There might be the misconception that natural gas distribution companies like NCNG were reaping huge profits this winter,” Davis said. “Demand was high because of the cold, but the rate increases were for fuel only. What we pay for fuel — the commodity of natural gas — is passed through directly to customers dollar for dollar. We made no additional profits from the rate increases this year.”

Throughout this winter’s energy crisis, NCNG encouraged customers to use flexible payment options including the company’s Equal Payment Plan. NCNG also continued to assist low-income families with energy costs through Project Share. Project Share was established in 1982 and has since raised more than $13 million for over 90,000 families experiencing a weather-related crisis. NCNG and CP&L collect donations from customers, employees, retirees and a $250,000 grant from the company’s foundation. Those funds are turned over to the N.C. Division of Social Services and the South Carolina Division of Economic Opportunity.

In January, NCNG announced it would give a one-time credit to its customers beginning Feb. 6. The average credit for the typical residential NCNG customer was about $9.40. The credit came from a federal ruling against three pipeline companies that deliver natural gas to NCNG. The companies were found to have overcharged NCNG for transportation costs. A total of $2.9 million was refunded to NCNG, which returned it directly to customers.

Progress Energy is a diversified holding company headquartered in Raleigh. It is one of the top 10 investor-owned utilities in the United States, with more than 19,000 megawatts of capacity and $7 billion in annual revenues. The company’s portfolio includes two major electric utility companies, CP&L and Florida Power, as well as NCNG, SRS, Progress Telecom and Energy Ventures.