The state Public Service Commission said Monday that natural gas costs will likely stay about the same this winter, 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 1 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 current savings from lower heating costs to make permanent improvements, such as weatherization, that will pay off in long-term savings."
Behind the expected small decline this year is the steady price of natural gas. Wholesale costs, which make up the largest portion of natural gas bills, are about 2 percent lower than a year ago with gas averaging $5.56 per 1,000 cubic feet (Mcf), according to the state's five major natural gas distributors. Those prices over the past two 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. By comparison, in November 2002, the average adjusted wholesale cost was $4.90 per Mcf.
The wholesale cost of gas accounts for two-thirds of bills, and a typical residential customer using 10 Mcf in November will pay a total bill of $96.90, down $1.29, or 1 percent, from $98.19 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 steady costs is that the amount of natural gas placed in storage in summer for use this winter is at above-average levels, 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.