Noting a decline in wholesale natural gas prices nationally, Pacific Gas and Electric Co. (PG&E) announced earlier this month that average January retail gas bills will decrease 6.9%, compared to January 2007 ($97.64 this month vs. $104.83 a year ago). The decrease is a combination of the lower wholesale costs for gas and smaller volumes of gas being used by customers, PG&E said.
The utility’s calculations are based on average usage by residential customers of 77 therms expected this January, compared to an average use of 84 therms in the same month last year. PG&E sees these prices as a footnote to a winter it characterizes as having adequate gas supplies and moderate prices throughout the United States.
The cost of gas this January is actually slightly higher than January 2007 (78.1 cents/th vs. 77.8 cents/th in January 2007), but this month’s gas costs are down 11.5% compared to last month when December charges averaged 88.2 cents/th, PG&E reported.
“Gas prices across the United States have decreased since last month,” the utility said. “These price decreases are due to the high levels of gas in storage, suggesting that the market should be well supplied with natural gas, even during periods of significantly colder-than-normal weather.”
PG&E acknowledged that gas costs still could “rise or fall in the winter months, depending on weather and market conditions,” but the utility thinks it has protected its retail customers from any severe price spikes through what it called “smart purchasing decisions, financial hedging against spikes, and using an extensive pipeline and storage infrastructure to help lower costs.”
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