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Xcel Energy Proposes December Natural Gas Prices

Posted on: Thursday, 17 November 2005, 15:00 CST

Xcel Energy today proposed a 13 percent decrease in December 2005 natural gas commodity prices. Coupled with an expected seasonal increase in use, however, projected bills would increase next month by 20 percent for typical residential customers and by 14 percent for typical small-business customers.

The natural gas commodity price proposed to the Colorado Public Utilities Commission for residential and small-business customers would decrease to $0.8779 per therm in December from $1.0130 per therm in November. The new price reflects anticipated natural gas costs only for the month of December.

Typical residential customers are expected to increase consumption by 37 percent in December compared to November, so their overall natural gas bills would increase to $157.83, based on consumption of 143.8 therms. This compares to $131.38 this month on use of 104.7 therms.

Typical small-business customers are expected to use 29 percent more natural gas in December compared to November. Typical natural gas bills would then be $716.44, based on consumption of 679.4 therms, compared to bills this month of $628.28 on use of 525.2 therms.

Natural gas bills next month -- while still higher than in December 2004 -- will be lower than originally anticipated several months ago by Xcel Energy. The company now projects that year-to-year, typical residential customer bills would be 24 percent higher and typical small-business customer bills would be 25 percent higher. The company had projected in September that winter bills would be 34-35 percent higher.

In December 2004, typical residential customer bills were $127.47, and $30.33 lower than projected for next month, based on the same consumption of 143.8 therms. Typical small-business customer bills were $573.19 in December 2004, and $143.18 lower than projected for next month, also based on the same use of 679.4 therms.

Xcel Energy does not profit from the sale of the natural gas commodity. All costs associated with increases or decreases in the commodity price of natural gas are passed along to customers on a dollar-per-dollar basis. If approved, the new prices would take effect Dec. 1.

Projected natural gas prices for December 2005 are lower than the forecast used for November 2005. Natural gas prices, however, remain at historically high levels, due to a continued tight balance between natural gas supply and demand.

While summer weather events continue to impact production and prices, local and national weather has been milder than normal, putting downward pressure on current and projected prices.

Injection of natural gas volumes into storage continued in November, even though November is normally a withdrawal month. Compared to last year at this time, national natural gas storage inventories are still about 140 billion cubic feet below last year's levels. At 3.168 billion cubic feet reported in storage, however, the inventory levels are still above the five-year average level of 3.106 billion cubic feet. Crude oil prices have also backed off by about $4 per barrel from last month to just below $59 per barrel.

Xcel Energy encourages customers to explore ways to conserve energy and lower their natural gas bills by visiting Xcel Energy at xcelenergy.com or by calling 800-895-4999 for a free copy of "60 Simple Ways to Save Money on Your Energy Bill." Customers also are encouraged to contact the company for information on Averaged Monthly Payment. Business customers may order a free copy of the "Small Business Guide to Energy Savings" on the company's Web site.

Customers may also wish to seek low-income energy assistance and information on energy efficiency programs by contacting the federal Low-Income Energy Assistance program (LEAP), which starts Nov. 1, or Energy Outreach Colorado (EOC). Call 866-HEAT HELP (866-432-8435) for further information.

Source: Business Wire

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