PSC predicts lower natural gas bills

ssloan@herald-leader.comOctober 31, 2012 

  • Price changes vary for other types of heat

    Kentucky's electric-heat users, 39 percent of the state, are expected to see somewhat higher bills on average this winter, the Public Service Commission predicted.

    The 10 percent of the state's population who heat with propane can expect slightly lower costs than last year.

    The 3 percent who use fuel oil to heat are expected to see slightly higher costs than last year.

The state Public Service Commission said Wednesday that natural gas costs at the start of the winter heating season are expected to be lower than at any time in the last 10 years.

It's good news for the 44 percent of the state's residents who use the fuel to heat their homes.

The average resident can expect to pay about 12 percent less this November than last, according to the commission's analysis. But the organization warned that weather, not the price of gas, is the biggest factor in determining total energy costs.

"Consumers should always look for ways to reduce energy usage," PSC Chairman David Armstrong said in a statement. "It is wise to invest a portion of the current savings in permanent improvements, such as weatherization, that will pay off by reducing energy consumption and thus help insulate consumers from higher energy costs in the future."

Behind the decline this year is the lower price of natural gas. Wholesale costs are about 20 percent lower than a year ago with gas averaging $4.43 per 1,000 cubic feet (Mcf), according to the state's five major natural gas distributors. Those prices over the past few years have remained at less than half the peak prices seen in 2008. In August 2008, the wholesale cost peaked at $15.17 per Mcf.

The wholesale cost of natural gas accounts for a little more than half of bills, and a typical residential customer using 10 Mcf in November will pay a total bill of $85.55, down 12 percent from a year ago. The price of gas, by law, is not allowed to be marked up. Charges to customers and delivery fees are where utilities make their profits.

Another factor for the predicted lower costs is that the amount of natural gas placed in storage in summer for use this winter is at an all-time high, according to the federal Energy Information Administration. And there have not been base rate increases this year for any of Kentucky's five largest natural gas distribution companies: Atmos Energy, Columbia Gas of Kentucky, Delta Natural Gas, Louisville Gas and Electric, and Duke Energy Kentucky.

Scott Sloan: (859) 231-1447. Twitter: @HeraldLeaderBiz

Lexington Herald-Leader is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service