Natural Gas

Natural Gas

Natural gas prices

There are two main components in natural gas bills:

Distribution – A charge for delivering natural gas to a home or business. The charge:

  • Covers distribution system costs such as local pipes, meters and customer service expenses.
  • Does not change monthly but is adjusted periodically after review by state regulators.

Supply or commodity - The cost of natural gas that MGE buys for its customers is passed through to customers as a separate charge on the bill. It changes monthly depending on the:

  • Current market price of natural gas.
  • Price of gas in storage.
  • Financial hedging that mitigates volatile price changes.

Traded as a commodity

On the New York Mercantile Exchange (NYMEX), natural gas prices are often volatile and follow price trends for domestic and global oil markets. The market’s volatility is due to:

  • Tighter supplies.
  • Global tensions.
  • High cost of competing fuels such as oil and propane.
  • Decreasing natural gas supplies from Canada.
  • Weather, such as extreme cold weather or hurricanes that may damage gas facilities. 
  • Increasing international demand for natural gas.

At MGE, we:

  • Aggressively pursue the best natural gas market prices available for customers.
  • Begin to buy gas supplies in the summer and put this gas into storage to:
    • Ensure adequate supplies for winter.
    • Act as a hedge against possible higher winter prices.
  • Employ a financial risk management program to reduce price swings for customers caused by volatile gas prices.

Control your costs

MGE offers energy-saving tips and billing plans to help you manage your energy costs.

Residential customers

Commercial customers

For more information

American Gas Association
The Energy Information Administration (U.S. Department of Energy)
The Natural Gas Supply Association