Natural gas prices hike bills
Atmos Energy says it's just passing on commodity cost
June 20, 2008
Steamboat Springs — Natural gas rates increased 23 percent for the area’s Atmos Energy customers as of June 1, Atmos Public Affairs Manager Kevin Kerrigan said.
Kerrigan attributed the increase to high natural gas prices. Atmos just distributes the gas, he said. Prices are determined through trading on the national commodities market.
“We secured supplies on the market to pass on to our customers,” he said. “It’s gas we don’t receive any profit on. We pass on the cost, penny for penny, to our customers.”
At the beginning of September, natural gas was trading at about $5.50 per million British thermal units. A BTU is the amount of heat required to increase the temperature of a pint of water by 1 degree Fahrenheit. One million BTUs amount to about 1,000 cubic feet of natural gas.
Prices were up to about $8 in January. On Thursday afternoon, natural gas was trading at about $13 per million BTU.
“They’re just at record levels right now,” Kerrigan said of prices. “There’s many contributors to the cause of natural gas being as high as it is. For the most part, it’s supply and demand.”
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Jim Greenwood offered a supplemental theory. He is director of the Colorado Office of Consumer Counsel, which serves as an advocate for consumers in electric, gas and telecommunications rate and rule-making matters. Greenwood said the price increase is partly a result of the new Rockies Express Pipeline, which transports Colorado natural gas east.
The final miles of the western part of the line, which runs from Weld County to Missouri, came on line May 20. The first part of the line began service Jan. 12. The Rockies Express, along with other planned pipelines, will increase demand from other states and therefore prices for Colorado consumers, Greenwood said.
“For years, those prices have been artificially depressed because of take-away capacity – there wasn’t enough pipeline to move natural gas out” of Colorado, he said. After the Rockies Express started running, the prices in the state increased to levels comparable with the rest of the nation.
Although Kerrigan wouldn’t speculate about the future of natural gas prices, Greenwood did.
“The price has gone up nationally, and they’re not coming back down,” Greenwood said. “This is the new normal.”
Kerrigan said consumers should focus on conservation.
“If you can, put more insulation in your home,” he said. “Go through those projects that people often save till the cold winter months. This is the time when people should caulk windows and doors.”
Atmos customers also can set up a budget billing plan, which allows them to pay each month based on a rolling 12-month average of their bill. That standardizes each bill, which brings down costs in the heavy winter months and brings up costs in summer, Kerrigan said.
If natural gas prices do drop, Atmos customers could see a rate cut, he said.
“If we see a reduction, and that’s absolutely what we hope to see, of course that will be passed on, penny for penny, back to the consumer,” Kerrigan said.