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Winter gas bills expected to drop

Tuesday, October 6, 2009
(Updated 5:54 am)

North Carolina’s natural gas users can expect to see significantly lower bills this winter, a welcome change fueled by increased supplies and decreased demand.

Piedmont Natural Gas, the state’s largest supplier, announced Monday that winter heating costs could drop 10 to 20 percent compared to last year.

For the typical Tar Heel homeowner, that could translate into a savings of $15 to $20 a month, the Charlotte-based company said.

“This is certainly good news for customers,” said David Trusty, the company’s managing director of public relations. “This is a cost that can go up and down.”

As natural gas prices rise and fall, utility companies can pass those costs or savings along to their customers. In recent years, the price trend has been rising.

But currently, prices are down about 13 percent from last year because of abundant reserves and reduced demand brought on by the recession.

The wholesale cost of gas represents 70 percent of a customer’s monthly bill.

“I would say 2002 was the last time we had lower winter rates,” said Jan Larsen, an engineer with the Public Staff of the N.C. Utilities Commission. “In 2005, after (hurricanes) Katrina and Rita, that really started a whole new era of higher rates that lasted until about a year ago. Then, they started to fall.”

Larsen said Piedmont customers who paid an average bill of $146 a month last winter will pay $130 a month this year. Piedmont officials could not confirm those figures.

The company serves 725,000 customers in North Carolina, including 72,000 in Guilford County.

Piedmont stressed that its forecast is based on current price projections and assumes normal winter temperatures. The company said that temperatures colder than forecast could increase a customer’s gas consumption and result in higher bills.

But the American Gas Association in Washington said prices are likely to remain low this year barring extremely low temperatures for extended periods.

That’s because utilities purchase natural gas from suppliers throughout the year and store it underground for winter delivery.

“With natural gas storage at all time highs and prices well below past years, homeowners across the nation are in for some well-deserved relief,” David Parker, president and CEO of the AGA, said in a news release. “We’re pleased to report that customers will have ample access to natural gas when the weather grows cold.”

A report released in June said that natural gas reserves have increased 39 percent between 2006 and 2008.

 

Contact Donald W. Patterson at 373-7027 or don.patterson@news-record.com

 

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