Natural gas prices lower than expectedPublished 10:40am Thursday, January 7, 2010
By JESSICA SIEFF
Niles Daily Star
Though it might not feel like it, Michigan residents are getting a bit of a break on their home heating bills.
Word on the snow-covered street is, those bills have been a little lower than expected during these winter months.
The Michigan Public Service Commission recently reported that prices for natural gas, expected to rise for consumers this year had actually come out less than originally predicted – good news for customers who may be already dealing with financial pressures.
“Over last year, yes they can probably expect to see a 30 to 35 percent decrease in their energy bill,” Jim Taylor, key account executive for SEMCO’s Eastern Division, said Wednesday.
The lower than expected prices in natural gas, he said “basically is an issue of supply and demand, over all. If the supply is there and meets demand the price will drop to the price point.”
Of course such a supply can be affected under various circumstances such as an unexpected natural disaster or extreme weather conditions.
But it was a relatively warm November and December, a nice start to the winter months when talking about heating the home.
In addition, more and more people are taking extra time to secure their homes for energy efficiency, another aspect that could impact costs for consumers.
Taylor said storage levels also make a difference. Those levels are rather high for the current time of year.
“Storage levels are up and that’s a good way to start the heating season,” he said. Without the need to replenish the stock of natural gas, consumers are actually saving.
According to the Michigan Public Service Commission, temperatures are 2 percent warmer than average, and storage levels are 13.6 percent above the five-year average.
Rates can change as often as monthly, Taylor said, but current SEMCO rates are at $.73 per 100 cubic feet, 30 percent lower than rates recorded last year.
“That’s total commodity cost,” he added, gas and delivery to the home.
The arctic air bearing down on the state could change things.
“Due to the cold snap, the futures of gas, they’re edging up a little bit,” Taylor said. Still, he said, “we’re looking at them begin relatively stable even into next year.”
For now, consumers can continue to do their part to keep heating costs down.
SEMCO offers plenty of suggestions to consumers and the home heating credit program is another way for consumers to save on their monthly bills.
“One thing we recommend is energy efficiency,” Taylor said.
With lower than expected bills and money saved, it’s likely consumers would agree.