Xcel Energy Proposes January Natural Gas Prices
Xcel Energy today proposed an 18 percent increase in January 2006 natural gas commodity prices. Coupled with a slight increase in use, projected bills would increase next month by 17 percent for typical residential customers and by 24 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 increase to $1.0321 per therm in January from $0.873 per therm in December. The new price reflects anticipated natural gas costs only for the month of January and includes the benefits of Xcel Energy’s hedging activities, which are projected to save customers $28 million.
Typical residential customers are expected to increase consumption by 2 percent in January compared to December, so their overall natural gas bills would increase to $183.34, based on consumption of 146.6 therms. This compares to $156.42 this month on use of 143.8 therms.
Typical small-business customers are expected to use 7 percent more natural gas in January compared to December. Typical natural gas bills would then be $881.34, based on consumption of 730.1 therms, compared to bills this month of $709.78 on use of 679.4 therms.
In January 2005, typical residential customer bills were $125.31, and $58.03 lower than projected for next month, based on the same consumption of 146.6 therms. Typical small-business customer bills were $592.47 in January 2005, and $288.87 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 Jan. 1, 2006.
Projected natural gas prices for January 2006 are higher than the forecast used for December 2005. Natural gas prices remain at historically high levels due to a continued tight balance between natural gas supply and demand.
On the supply side, the effects of Hurricanes Katrina and Rita continue to impact the production of natural gas in the Gulf of Mexico, though shut-in production continues to decline. About 2.3 billion cubic feet per day of production still is reported unavailable due to storm-related damage.
On the demand side, local and national weather has been colder than normal in the last half of November and December, putting upward pressure on current and projected prices.
Natural gas volumes withdrawn from storage are a critical resource used to supply the increased customer loads. Compared to last year at this time, as of Dec. 2, 2005, national natural gas storage inventories are about 58 billion cubic feet below last year’s levels. At 3.17 trillion cubic feet of natural gas reported in storage, however, the inventory levels are still above the five-year average level of 2.96 trillion cubic feet. Crude oil prices are up slightly from last month at about $59.60 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 1-800-895-4999 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 started Nov. 1, or Energy Outreach Colorado (EOC). Call 1-866-HEAT HELP (1-866-432-8435) for further information.