Xcel Energy’s Colorado utility natural gas bills will be more than one-third lower this August than a year earlier, as overall wholesale gas prices will be down substantially year-over-year, the Minnesota-based utility holding company said on Friday.
For retail Colorado residential gas customers, bills will drop 2% in August, but retail business customers will see a 4% increase, compared with current charges. The utility said the proposed change reflects anticipated natural gas prices and impact on customer bills for August only.
If approved by the Colorado Public Utilities Commission (PUC), the new natural gas commodity prices would take effect Aug. 1.
Xcel said its commodity price proposed to the PUC for residential and small-business customers would increase by 2% next month — to 0.3124 cents/th — from the current 0.3068 cents/th in July. For comparison, the August 2008 price was 0.9576 cents/th, or more than three times as high compared to what has been proposed by the Colorado utility for next month.
Typical residential customers are expected to decrease use by 6% in August, compared to their use this month, Xcel said. Overall monthly bills would decrease to $18.29, based on projected use of 15 therms. This compares to July bills of $18.70 on projected use of 16 therms, according to the utility. “Typical August 2008 bills were $27.77. That was 34% or $9.48 higher than projected for next month, adjusted for expected, average current use of 15 therms.”
Xcel cited several reasons for the price change, including the Nymex Henry Hub natural gas contract falling 36 cents from $3.73/Dth on June 9, when the July monthly gas cost adjustment was set, to $3.37/Dth on July 10. “The decline was influenced both by the industry’s increasing pessimism that the U.S. economy would consume more natural gas and rising natural gas stockpiles,” a Denver-based Xcel spokesperson said.
Regionally, the Colorado Interstate Gas basis narrowed by 41 cents to 75.5 cents/Dth as the August Nymex contract rolled forward, netting an August forward price estimate of $2.62/Dth in Rocky Mountain markets, Xcel said, noting a 5-cent increase from the July 2009 estimate, despite the significant decline in national markets.
The federal Energy Information Administration reported a net storage injection of 75 Bcf for the week ending July 3 to 2.796 Tcf. This level is 452 Bcf above last year’s level and 601 Bcf higher than the five-year average for the same time period. Crude oil markets also reversed their trend from early June with reports of the largest weekly decline (falling $6.80/bbl) for the week ending July 10 since January 2009, Xcel said.
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