Natural Gas Prices Tumble 36 Percent for State Customers

Oklahoma Natural Gas Co. doesn’t have a specific estimate, but, based on recent price trends, the utility expects customers to pay less this winter for natural gas, said Don Sherry, ONG spokesman.
Natural gas prices have already decreased significantly from the first of the year.
Prices peaked at $12.01 per dekatherm in January. This month, prices are at the current per-dekatherm price of $7.66 — a 36 percent drop, Sherry wrote via e-mail. A dekatherm is equivalent to 1 million Btu. A Btu, or British thermal unit, is the amount of heat required to raise the temperature of one pound of water 1 degree Fahrenheit at 60 degrees Fahrenheit.
Record natural gas storage levels and the lack of any significant hurricanes this year have set the stage for significantly lower prices as consumers head into the winter heating season, the Energy Information Administration said earlier this month.
The EIA’s assessment is that natural gas customers should pay 14 percent less this winter across the nation.
The EIA report has already had an impact as a large East Coast utility recently issued a statement regarding lower rates.
Baltimore Gas and Electric Co., a utility subsidiary of Constellation Energy, stated residential customers could anticipate a 15 percent decrease from last winter in the gas portion of their total bill during the upcoming winter heating season. The utility cited the mild hurricane season, increased U.S. natural gas production and its “proactive procurement” program for the move.
The heating begins Nov. 1 and runs through March 31.
BGE’s message was similar to a host of other utilities across the country in recent weeks heralding lower gas prices.
While ONG has not made such a statement, Sherry said the utility “hopes” to see lower rates.
“Bear in mind that we have already purchased a substantial portion of our winter supply using fixed price contracts and some of that gas was more expensive than the current market price,” Sherry wrote. “Of course, we can’t wait until winter to acquire all of the gas that our customers will need. So the fixed-price purchases get blended into the overall cost, and our customers pay an average price.”
Meanwhile, the American Chemistry Council cautioned Congress against using the expected lower winter gas costs as an excuse to delay action on legislation to open more of the federal offshore to drilling. ?

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