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RRC Notes Texans Had Lowest 2006 Gas Rates in South

While natural gas futures prices recently soared to post-Katrina levels, recent data from the U.S. Department of Energy (DOE) indicates that Texans -- during 2006 -- had the lowest average residential natural gas rate among most of the southern states, according to Michael L. Williams, chairman of the Texas Railroad Commission (RRC).

Williams noted that the southern states include Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Virginia and West Virginia. According to the RRC, Texas has also had cheaper gas than the U.S. average from 2000 through 2006, which was the last year of data available.

DOE's listing of average residential natural gas rates per thousand cubic feet includes both the cost of the natural gas commodity and the average cost of service charge, both of which comprise a typical residential gas bill. Gas use for homes averages about 6 Mcf each month.

"Affordable energy is important to Texans. Since 2000, the average residential bill in Texas has consistently been below the national average rate," Williams said. "The latest data available from 2006 shows Texans pay on average about $13.11/Mcf, compared to an average of $15.97/Mcf paid by residents in other Southern states. Texas' average cost per Mcf is less than Alabama's by over $5 and less than Florida's by over $8."

Overall, Texas ranked 18th cheapest out of all 50 states and the District of Columbia. The top 10 lowest average natural gas costs in the country for 2006 were Alaska at $6.84/Mcf; Colorado, $10.45/Mcf; North Dakota, $10.80/Mcf; Utah, $11.02/Mcf; South Dakota, $11.11/Mcf; Illinois, $11.18/Mcf; Montana, $11.26/Mcf; Nebraska, $11.30/Mcf; Wyoming, $11.60/Mcf; and Minnesota, $11.67/Mcf. The most expensive average natural gas cost during 2006 was in Hawaii at $35.28/Mcf, followed by Florida at $21.54/Mcf.

Williams noted that under Texas law, as in many other states, utilities are only allowed to pass on what they pay for natural gas. Typically, the cost of the commodity makes up about 70% of a residential gas bill. Even with the cost of the commodity factored in, Texas continues to have one of the lowest average residential gas rates per Mcf in the nation, the chairman added.

"We owe some thanks to the state's healthy natural gas industry. One reason Texas has such reasonable gas rates is that we produce natural gas here at home and export more than we use," Williams said. "The industry [in Texas] produces about 6.3 Tcf of natural gas each year and exports about half of that production to other states and Mexico."

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