As a result of higher natural gas prices, Xcel Energy last week proposed an 18% increase in January 2006 natural gas commodity prices. Coupled with a slight increase in use, projected bills would increase next month by 17% for typical residential customers and by 24% for typical small-business customers. If approved, the new prices would take effect Jan. 1, 2006.
Xcel said the natural gas commodity price proposed to the Colorado Public Utilities Commission for residential and small-business customers would increase to $1.0321 per therm in January from $0.873 per therm in December. The new price reflects anticipated natural gas costs only for the month of January and includes the benefits of Xcel Energy’s hedging activities, which are projected to save customers $28 million.
The company said typical residential customers are expected to increase consumption by 2% in January compared to December, so their overall natural gas bills would increase to $183.34, based on consumption of 146.6 therms. This compares to $156.42 this month on use of 143.8 therms. Likewise, typical small-business customers are expected to use 7% more natural gas in January compared to December. Typical natural gas bills would then be $881.34, based on consumption of 730.1 therms, compared to bills this month of $709.78 on use of 679.4 therms.
Xcel said typical residential customer bills during January 2005 were $125.31, which is $58.03 lower than projected for next month, based on the same consumption of 146.6 therms. Typical small-business customer bills were $592.47 in January 2005, which was $288.87 lower than projected for next month, also based on the same use of 679.4 therms.
Xcel said a number of factors have come together this year to force natural gas prices significantly higher. Natural gas prices remain at historically high levels due to a continued tight balance between natural gas supply and demand. On the supply side, the effects of Hurricanes Katrina and Rita continue to impact the production of natural gas in the Gulf of Mexico, though shut-in production continues to decline. About 2.3 Bcf/d of production still is reported unavailable due to storm-related damage. On the demand side, local and national weather has been colder than normal in the last half of November and December, putting upward pressure on current and projected prices.
Xcel said it encourages customers to explore ways to conserve energy and lower their natural gas bills by visiting Xcel Energy at xcelenergy.com or by calling 1-800-895-4999 for a free copy of “60 Simple Ways to Save Money on Your Energy Bill.”
Xcel serves energy customers in portions of Colorado, Kansas, Michigan, Minnesota, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, and Wisconsin.
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