November 9, 2006
Natural Gas Price Drop Means Lower Winter Heating Bill
The region’s natural gas company is holding true to fall predictions of lower heating costs this winter.
On October 31, the Missouri Public Service Commission announced that Atmos Energy Corporation had filed a proposed price reduction for natural gas customers in the Bowling Green and Hannibal/Canton District, which includes Scotland County. Atmos customers will see natural gas rates drop under the filing that took effect on November 1, 2006.
Earlier in the month the corporation had reported that residential customers could expect winter’s heating bills to be lower if current projections for natural gas supplies and winter weather did not change. The company forecasted sufficient natural gas supplies to meet the needs of customers across its 12-state service territory.
“We expect to start the winter season with lower prices than last year, thanks to the mild hurricane season and additional natural gas in storage,” said Kim Cocklin, Atmos Energy senior vice president of utility operations. “Lower prices today underscore that natural gas is the country’s best energy value and Atmos Energy is looking forward to a more normal winter.”
The federal government’s Energy Information Administration (EIA) issued a similar forecast for the upcoming winter. The EIA short term energy forecast predicted natural gas expenditures could be approximately 13 percent lower than last year for the average U.S. household. Some regions will experience more or less savings, depending on the weather and natural gas usage. The National Oceanic Atmospheric Administration (NOAA) predicts this winter will be six percent colder than last winter but still slightly warmer than normal.
The Atmos filing cited estimated changes in the wholesale cost of natural gas as well as a change in the Company’s Actual Cost Adjustment (ACA) factor for lowering the rate.
The ACA factor is a mechanism, which tracks any over-collection or under-collection of actual natural gas costs over a 12 month period. The net over- or under-collected balances are subsequently either refunded or collected the next year.
A residential customer currently pays approximately $0.90 per Ccf (per 100 cubic feet of gas). Under this filing, the rate will drop to approximately $0.84 per Ccf, a decrease of approximately $0.06 per Ccf.
Atmos announced similar price adjustments in other districts in northeast Missouri. The Kirksville region saw its prices drop from $1.13 per Ccf to $0.68 per Ccf, a decline of nearly 45 cents. The Palmyra district dropped rates from $0.90 per Ccf to $0.084.
Approximately 65% to 75% of a customer’s natural gas bill reflects the cost of natural gas from wholesale suppliers. The wholesale cost of natural gas (the cost your local natural gas company must pay to its suppliers for natural gas) is not regulated by the Missouri Public Service Commission.
The wellhead cost of natural gas is unregulated and is primarily driven by supply, demand and the weather. The Missouri Public Service Commission does conduct an annual regulatory review to ensure that regulated natural gas companies make prudent decisions in securing natural gas supplies for their customers.
Atmos Energy Corporation serves approximately 12,100 natural gas customers in its Hannibal/Canton District, which includes the Missouri counties of Clark, Lewis, Knox, Marion, Ralls and Scotland. Atmos serves approximately 1,420 natural gas customers in its Bowling Green District in Pike County.