Xcel Energy asked regulators in Colorado to let it lower its natural gas rates to reflect a 24% drop in wholesale commodity costs in July for its residential and small business utility customers. Bills for the month should be down by 12% and 24% for residential and small business customers, respectively.

“For a year-to-year comparison, prices [next month] should be less than half of those in place in July 2008 [when global gas prices skyrocketed], hitting 30.7 cents/therm, compared with an 80.2 cents/therm price a year earlier,” said an Xcel spokesperson. Bills on average this July will be 29% lower than they were on average in the same month last year.

Xcel said the commodity price proposed to the Colorado Public Utilities Commission (PUC) is going to drop to 3.068 cents/therm from the current price of 4.011 cents/therm.

“Typical residential customers are expected to decrease use by 10% in July, compared to their use this month,” the spokesperson said. “Overall bills would decrease to $18.70 for 16 therms; they were $21.26 for 17.8 therms this month.”

Xcel quoted the Nymex Henry Hub price as falling to about $3.50/Dth at the end of May from a six-week high of $4.30/Dth on May 11. From that level the price moved back up to $3.73/Dth on June 9, the utility said. “The increase in Nymex prices was reportedly sustained by the continued belief that demand will lift prices as the recession ebbs,” the spokesperson said.

Regionally, the Colorado Interstate Gas basis for July is 87 cents below the June 2009 estimate, said the spokesperson, noting federal statistics continue to show natural gas storage levels running higher than a year earlier. As of June 5, there was about 568 Bcf more in storage than a year earlier.

Last month Xcel’s said its Colorado utility gas customers’ June bills would be 30% lower than they were in the same month last year and they would drop 17% from their April levels in May (see Daily GPI, May 25).

©Copyright 2009Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.