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

Natural gas is one of many commodities traded on the New York Mercantile Exchange (NYMEX). Gas prices can fluctuate due to:

  • Changes in gas supplies, including production and storage. In addition to traditional domestic supplies of gas, the supply is affected by:
    • Fluctuations in natural gas supplies from Canada.
    • New sources of supply, such as shale gas extracted from new fields of exploration in Pennsylvania, North Dakota and the Texas Panhandle.
  • Global tensions.
  • High cost of competing fuels such as oil and propane.
  • Weather, such as extreme cold weather or hurricanes that may damage gas facilities. 
  • Fluctuations in demand for natural gas both domestically and in oversea markets.
  • Increasing reliance on natural gas to replace coal in manufacturing electricity.

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