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Natural gas costs at the start of the 2013-14 heating season will be higher than last year, but are still well below the peak reached in 2008, the Kentucky Public Service Commission said last week.
On average, Kentucky customers can expect to pay about 19 percent more this November than last if they consume 10,000 cubic feet of natural gas. The average total bill for 10,000 cubic feet – including base rates – is projected to be about $101.81.
That is down nearly $49 since November 2008 – a decrease of 32 percent. The lower cost of natural gas has more than offset increases in base rates over that time.
“Natural gas prices have rebounded from last year’s abnormally low levels, but this year’s prices are still quite low,” PSC Chairman David Armstrong said. “Demand is up because more natural gas is being used to generate electricity and the overall economy has improved.
“But the significant increases in gas production and supply are projected to provide price stability in the coming years,” he said. “The very large year-to-year fluctuations we saw in the previous decade are unlikely to be repeated anytime soon.”
Weather – not price – is the dominant factor in determining the amount of energy that consumers use to heat their homes and thus the size of their heating bill, Armstrong said. The best weapon consumers have to manage their energy costs is to take steps to reduce consumption, he said.
“The best thing consumers can do is to reinvest a portion of the savings from relatively low energy costs now into permanent improvements, such as weatherization, that will provide insulation against higher energy costs in the future,” Armstrong said.
Wholesale natural gas costs this year are, on average, about 35 percent higher than the very low levels of a year ago. Only one of Kentucky’s five large natural gas distribution companies has received a base rate increase in the last year.