Gas prices fluctuate
Prices for natural gas have again fluctuated this winter, with prices going up in response to the cold periods in December and February. Changing natural gas prices affect the gas supply portion of your bill. This is a separate charge that MGE passes on to customers without a markup.
Even though we experienced extremely cold weather this heating season, MGE expects customer gas bills to decrease as much as 15% compared to last winter.
That's due to lower overall natural gas prices. Here's a snapshot of gas market prices in the last two years:
In December of 2005, natural gas futures traded at a record high $15.378 per dekatherm (Dth). Prices in 2006 started above $10 per Dth but dropped to below $6.50 by March 2006 before gradually increasing during the summer. Prices hit a low in the fall, only to increase once winter began.
This winter, we have seen fluctuation, with gas prices above $7.50 during a December cold snap and through the extreme cold weather in February.
Other recent factors weighing heavily on prices are capacity issues affecting production and delivery. There is almost no excess capacity in the nationwide pipeline system or gas production facilities. These limitations have caused volatility in the market, as market prices react to balance the available supply with demand.
The forecast is for natural gas to continue to be a volatile market, with prices changing rapidly on the news of the moment.
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