Dominion East Ohio (DEO) said it believes increased natural gas production from the Marcellus and Utica shales, both in Ohio and in neighboring states, will help ensure that the company has sufficient supplies with stable prices during the current winter heating season.
Jeff Murphy, DEO general manager for commercial operations, said natural gas prices for the remainder of the winter should remain below the prices seen last year during the polar vortex.
"Once again, customers can set their thermostats with confidence this winter," Murphy said Monday.
Murphy said that last February, the utility’s standard service offer (SSO) and standard choice offer (SCO) rates had increased to more than $6/Mcf. But he said additional supplies of natural gas from the Marcellus and the Utica helped keep prices in check for most of the year, despite increased demand.
DEO's SCO rate for December is currently $4.712/Mcf, up 6.7% (29.4 cents) from the $4.418/Mcf rate for SCO and SSO in December 2013.
"Last winter's weather really stretched natural gas supplies and prices on a national level," Murphy said. "Thankfully, the market was up to the task because of increased gas production and sufficient natural gas storage inventories. DEO's gas suppliers did a remarkable job in delivering gas to our system, and our system operated reliably throughout the long winter.
"Even though most weather forecasts are not calling for a return to repeated polar vortex events this winter, we've taken steps to ensure reliable natural gas deliveries to our 1.2 million customers. While market conditions are constantly changing, natural gas prices are expected to be moderate once again."
After last winter's polar vortex Murphy testified before the Public Utilities Commission of Ohio in February to discuss his company's response to the crisis (see Daily GPI, Feb. 21). DEO serves about 1.2 million gas customers overall in the northern, western and eastern portions of Ohio.
"One of the major drivers of our supply security is increasing natural gas production right here in Ohio," Murphy said. "Even though demand continues to grow as more natural gas is used for electric generation and our economy continues to recover, production increases have kept a lid on prices. If our winter weather returns to more normal temperatures, customers may also see a decrease in their bills because of lower usage as well."
DEO's parent company, Richmond, VA-based Dominion, is one of the largest energy producers in the United States, producing about 24,900 MW of electric power annually. It also has a large collection of gas storage facilities, operating storage fields with 947 Bcf of capacity. Dominion has 10,900 miles of natural gas transmission lines in 10 states.