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Xcel Energy Proposes Sharp Drop in February Natural Gas Prices

Posted on: Wednesday, 18 January 2006, 18:02 CST

Xcel Energy today proposed a 21 percent decrease in February 2006 natural gas commodity prices. Coupled with a decrease in expected use, projected bills would decrease next month by 31 percent for typical residential customers and by 35 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 $0.8180 per therm in February from $1.0321 per therm in January. The new price reflects anticipated natural gas costs only for the month of February.

Typical residential customers are expected to decrease consumption by 18 percent in February compared to January, so their overall natural gas bills would decrease to $125.83, based on consumption of 119.9 therms. This compares to $183.34 this month on use of 146.6 therms.

Typical small-business customers are expected to use 22 percent less natural gas in February compared to January. Typical natural gas bills would then be $569.31, based on consumption of 569.9 therms, compared to bills this month of $881.34 on use of 730.1 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 Feb. 1, 2006.

Projected natural gas prices for February 2006 are lower than the forecast used for January 2006, yet natural gas prices remain at historically high levels due to a continued tight balance between supply and demand. The lingering effects of Hurricanes Katrina and Rita also continue to impact natural gas production in the Gulf of Mexico.

Since mid-December 2005, however, the weather has taken a decidedly warmer turn, reducing natural gas loads and forcing a decline in natural gas futures prices. The Energy Information Administration reported that for the week ending Jan. 6, 2.623 trillion cubic feet of natural gas was in storage, well above the five-year average level of 2.345 trillion cubic feet. Crude oil prices are at just under $64 per barrel, up from last month's price of about $59.60 per barrel.

In February 2005, typical residential customer bills were $98.22, or $27.61 lower than projected for next month, based on the same consumption of 119.9 therms. Typical small-business customer bills were $438.15 in February 2005, or $131.16 lower than projected for next month, also based on the same use of 569.9 therms.

Xcel Energy encourages customers to explore ways to conserve energy and lower their natural gas bills by visiting 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). They may call 1-866-HEAT HELP (1-866-432-8435) for further information.

Source: Business Wire

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