DECATUR – Natural gas prices are dropping through the floor with no signs of stopping.
That’s good news for the 812,000 Ameren Illinois gas customers who have already seen the cost of the fuel deflate 35 percent in the last year. Natural gas prices are now hovering at their lowest levels since 2002.
And the utility now says its gas supply charge for April will be 42.05 cents per therm compared to the 51.94 cents a therm rate it was charging in March, a drop of 19 percent.
All this price deflation is being driven by America’s resurgence as a source of fossil fuels unlocked by enhanced extraction techniques, like fracking. The nation is now producing more oil than Saudi Arabia, for example, and is also the world’s top producer of natural gas.
“Natural gas prices continue to decline in the U.S. due to record levels of natural gas production coupled with relatively flat demand,” said Ken Dothage, director of gas supply for Ameren Illinois.
“U.S. prodution was up 11.5 percent from December 2013 to December 2014,” Dothage added. “This is good news for natural gas customers who are reaping the benefits.”
Those benefits are felt year-round by customers who cook with gas, use gas heaters for hot water or gas dryers to dry their clothes, uses which typically account for 20 percent of gas burned in the average home. Overall, today’s gas prices mean a family that uses the average of 745 therms a year of gas will save $75 on their annual energy bill.
Looking ahead, however, the biggest impact of gas prices is felt in the cost of heating our homes, and there is more good news there. Ameren Illinois goes natural gas shopping in the spring and summer, when prices are always lower, to lock in future supplies for winter and it’s enjoying a buyers’ market.
“The combination of our storage practices as well as just the lower supply costs really will benefit our customers,” said utility spokeswoman Marcelyn Love, looking ahead to the 2015-16 heating season. “This is an especially good time to buy natural gas.”
But even in this natural gas Garden of Eden, there is a serpent in the form of a price hike. While Ameren Illinois passes on the cost of the fuel without markup, it makes its profit on fees charged to deliver that gas to homes and businesses. The utility has a delivery rate increase request pending with the state’s energy regulators that would add between $3 and $6 a month to customer bills, based on pricing zones where they live and how much gas they burn.
If regulators sign off on the increase, it will take effect Jan. 1.
This article was written by TONY REID from Herald & Review, Decatur, Ill. and was legally licensed through the NewsCred publisher network.