Natural gas savings due to low natural gas costs
MGE's natural gas customers have enjoyed a period of significantly reduced costs. With the fourth-warmest winter in Madison history and the third warmest in state history, and the early arrival of spring, MGE expects its residential customers, on average, to realize a 16% savings on natural gas costs over last year.
Such savings are not exclusive to our region. The United States also has recorded a much warmer winter, which is keeping natural gas prices low across the nation. While other fuels have seen a steady climb in prices, natural gas prices have been falling.
Globally marketed fuels – gasoline, propane and others derived from crude petroleum sources – have been far more volatile. Natural gas used in the United States comes mainly from the lower 48 states and Canada.
Two factors contributing to the current low market prices for natural gas:
- There is a boom in new domestic gas sources derived from the extraction process known as hydraulic fracturing, or "fracking." Significant supplies of shale gas are being extracted in Pennsylvania, the Texas Panhandle and North Dakota.
- Record levels of storage for natural gas, aided by the unusually mild winter, are keeping supplies well above seasonal norms.
Natural gas prices on the New York Mercantile Exchange (NYMEX) have posted lows not seen since 2002.
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Natural gas prices