Low Natural Gas Prices Could Mean Customer Savings

By Beacon Staff

Though it may not feel like it lately, cooler temperatures and the winter chill are on the way. But Flathead residents may have less reason to dread turning on the heat, as a national drop in natural gas prices is expected to be passed on to Montana customers.

NorthWestern Energy spokesperson Claudia Rapkoch said natural gas costs are expected to decrease by 15 percent this winter, while electricity costs look to stay the same as last year.

“We certainly took advantage of attractive natural gas prices,” Rapkoch said. “The drop in energy across the board has been surprising; it’s a side benefit to a slow economy.”

According to reports from the Energy Information Administration, natural gas prices hit a low in September, selling at less than $3 per thousand cubic feet, compared to last year’s peak price of over $13. The market has slightly rebounded since then, but is still well below previous years’ numbers.

As the Flathead’s largest natural gas supplier, NorthWestern Energy fills its gas storage by the end of summer to prepare for the winter, Rapkoch said, allowing them to purchase low-cost gas for much of their winter supply.

The EIA reported that natural gas production has been above average in 2009. The Sept. 23 report estimated underground storage at levels of 3,525 billion cubic feet, exceeding the five-year average by 16 percent.

Americans also used less air conditioning in 2009, which resulted in less energy consumption, according to the EIA. The low prices are essentially the product of high supply and low demand.

A 15 percent cost reduction won’t necessarily translate into a lower energy bill, Rapkoch said, because gas prices are just one factor in determining how much is owed. Other factors, such as usage, are also part of the equation.

If this winter proves to be especially cold, customers who heat with natural gas will likely use more, meaning a higher bill. Likewise, if the Flathead experiences a mild winter this year, customers might use less, thus see a lower bill. Officials at the National Weather Service have predicted the latter, as the El Nino weather pattern strengthens through the winter. This typically results in milder temperatures and less snow, meteorologists said.

However, the Farmer’s Almanac predicts the opposite – a “numbing” winter with below-average temperatures for most of the country.

Homeowners should focus on manageable factors when budgeting for the winter, Rapkoch said.

“Weather aside, which we can’t control anyway, we can control to a large extent how much energy a home uses,” Rapkoch said.

Appliance efficiency and weatherization are controllable aspects homeowners can pursue if they are concerned about high payments, Rapkoch said.

But even with a potentially lower heating bill, some residents may have a tough time in a slow economy. There are several programs in place to help with these issues, said Kim DeWitt of the Community Action Partnership of Northwest Montana.

“Lower prices are going to always help people,” DeWitte said. “The reality is electric and natural gas prices are still difficult for people to pay when the economy is down.”

The Low-Income Energy Assistance Program helps families pay their bills based on their income. LIEAP applicants must prove that their income falls within the guidelines for the three months prior to the month they submit their paperwork.

The Energy Share program also helps with heating bills, providing a loan to help with a one-time emergency situation. DeWitt said the money comes from a revolving fund, and when the loan is repaid, it goes toward helping another household.

NorthWestern Energy provides a budget-billing program for all customers, which allows them to level out their annual bills to roughly the same payment each month. Customers on this plan would still get the benefits of the lowered gas prices, Rapkoch said, with a monthly bill adjustment.

The peak natural gas price in 2008 occurred on July 3, when it hit $13.58 per thousand cubic feet (mfc). The prices for September 2009 bottomed out at $2.25 mfc, the lowest price since 2002.

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