Pacific Gas and Electric Co. announced Tuesday that it forecasts a 26.6% drop in retail natural gas bills in November compared with bills during the same month last year. In November 2005, of course, wholesale natural gas prices were going through the roof because of the impact of Hurricanes Katrina and Rita on Gulf of Mexico production. In comparison to October 2006 bills averaging $26.58, however, the November bills will be more than 60% higher at $43.55.
Despite the month-to-month increase, the San Francisco-based utility said it has implemented a natural gas purchasing strategy that it claims has helped protect its customers against severe winter price spikes. In combination with conservation, the utility hedging can help customers control the size of their monthly natural gas bills, a utility spokesperson said.
"The absence of severe hurricanes so far in 2006 has resulted in the November natural gas market prices being significantly lower than this time last year," PG&E said, adding the caveat that November gas prices in the wholesale market tend to be higher than in October because of the anticipation of higher winter heating demands.
Average bills in November 2005 were nearly $60, PG&E said, compared with the expected average for this November of $43.55. The cost of gas in November last year was $1.29/th, compared to 79 cents/th this November, the utility said.
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