PECO Gas Supply Ready for Winter

PECO said it has secured all of its gas supply for this winter, including its coldest days when local demand for natural gas is highest. To ensure supply and hedge against price fluctuations, PECO buys and stores about a third of its winter gas supply during the non-heating months.

Completing a critical process in its winter readiness over the past several months, PECO has filled eight caverns along interstate pipelines with 22 billion cubic feet (bcf) of natural gas capacity. Locally, the company also operates two storage facilities — one that holds 1.2 bcf of liquefied natural gas, or LNG, and another contains nearly two million gallons of propane for use during peak demand days. When mixed with air, propane takes on similar characteristics as natural gas and can be used to supplement pipeline supplies on extremely cold days. At the LNG facility, the company also is finalizing $2.5 million in upgrades, replacing two of the plant’s five large vaporizers that change the liquefied gas back into a vapor form.

On a typical day, PECO’s gas supply for local customers flows from the Gulf of Mexico through the interstate pipelines that feed the Philadelphia region, as well as from the storage facilities. Ensuring that it has its winter supply in place before winter starts helps PECO avoid buying too much gas in the typically higher priced and more volatile spot market for natural gas.

“We buy gas in a variety of ways to provide our customers with the most competitive prices we can,” said Amy Hamilton, PECO manager, Gas Supply & Transportation. “The storage facilities allow us to buy large quantities of gas in the off-season when prices are typically lower, and they are a valuable asset in our supply portfolio.”

While gas prices are generally higher in the wintertime, Hamilton said prices over the past year have been more stable and much less volatile than the last several years. PECO’s gas supply charge, which has been stable all year at $1.06 per hundred cubic feet, or ccf, will be finalized later this month, effective December 1. It makes up roughly 80 percent of the total gas rate; the gas distribution charge (28 cents per ccf) has been the same since 1988.

Natural gas is expected to be the best home heating value this winter, according to the federal Energy Information Administration. The EIA said fuel price increases and weather-related increases in household consumption will mean about 10 percent more for heating, on average nationwide. Heating oil expenditures are projected to be up 22 percent and propane by 16 percent.

For those with natural gas heating, this winter’s weather and home energy efficiency will be the two key factors in total heating costs for this season. PECO provides energy efficiency tips, information on budget billing and consumer assistance, and discounted energy efficiency products at www.pecowinter.com.

PECO delivers natural gas to 480,000 residential, business and institutional customers in southeastern Pennsylvania in the suburban counties surrounding Philadelphia. The company delivered 76 bcf of gas in 2006.

Based in Philadelphia, PECO is an electric and natural gas utility subsidiary of Exelon Corporation (NYSE:EXC). PECO serves 1.6 million electric and 480,000 natural gas customers in southeastern Pennsylvania. Founded in 1881, PECO is one of the Greater Philadelphia Region’s most active corporate citizens, providing leadership, volunteer and financial support to numerous arts and culture, education, environmental, economic development and community programs and organizations.