Natural gas users can expect lower 2023 bills that mirror 2021
Published 6:13 pm Monday, November 13, 2023
Even with predictions that El Nino conditions could bring a colder-than-usual winter, homeowners who rely on natural gas appear to be on track to see their bills drop in the season ahead.
Based on current market projections and assuming normal winter weather, Columbia Gas said in a news release it expects the natural gas commodity portion of a customer’s bill – which is a significant component of natural gas bills – is estimated to be around 50% lower than the same period in 2022. If temperatures are colder or warmer than normal, usage amounts and bills could differ.
“With the costs of many everyday items continuing to rise, we know that every bit of savings can make a difference,” Columbia Gas of Virginia President and Chief Operating Officer Jennifer Montague said. “The decrease in the cost of natural gas comes as good news as we head into the winter months, when customers are typically using more to heat their homes.”
The American Gas Association issued its 2023 Winter Heating Outlook report Oct. 30, projecting natural gas prices for the months ahead will resemble those of 2021, rather than the elevated ones they experienced last year.
AGA pointed to higher gas production and inventories that are above a five-year average.
Communications Manager Stephanie Benson offered a similar outlook for Columbia Gas customers locally and across the Old Dominion.
“Columbia Gas of Virginia natural gas residential customers receiving their supply through default service may see a decline in winter heating bills this season compared to the previous year,” Benson said last week. “Based on current market projections and assuming average winter weather, the natural gas commodity portion of a customer’s bill – a significant component of natural gas bills – is estimated to be around 50% lower in contrast to this same period in 2022.”
In a report issued Oct. 19, the U.S. Energy Information Administration also forecasts lower average natural gas bills for U.S. consumers who heat their homes primarily with natural gas this winter heating season, compared with last winter.
Columbia Gas explained that there are two primary components of natural gas bills – the cost of the natural gas itself and the cost of delivering the natural gas to customers. The delivery costs, also called base rates, cover the costs associated with providing 24/7 service and emergency response, as well as the necessary costs to maintain, upgrade and operate Columbia Gas’ natural gas delivery system. This system includes about 5,400 miles of pipelines, regulator stations, meters and other facilities.
EIA projects that over the winter heating period, customers in the South could see their average bill drop from $579 last year to $494. Virginia is shown to be part of the southern U.S. in the agency’s study.
The national average gas bill for the winter is projected to drop from last year’s $764 to $601 in 2023.
“The lower wholesale natural gas prices this year have led us to expect a 21% decline in the U.S. average residential retail price for the 2023–24 winter,” EIA said in its report.
Benson pointed to several factors contributing to the anticipated decrease in the cost of natural gas this winter season.
“Current market prices are lower than last year due to increased production levels, lower exports due to softening European demand and filling storage at substantially lower prices than in previous years,” she explained.
Columbia Gas explained the price of natural gas is based on market prices.
There are several factors contributing to the anticipated decrease in the cost of natural gas itself this winter season, the company explained in its release. Current market prices are lower than last year due to increased production levels, lower exports due to softening European demand, and filling storage at substantially lower prices than previous years.
“Even with the estimated decrease in market prices for natural gas, we know there are times when it may be difficult for some customers to pay their utility bills,” Montague said. “We urge any customer, regardless of their situation, to contact us to explore the wide array of programs and options that can be utilized to keep customers connected.”
A U.S. Census Bureau 2022 report showed that 46% of U.S. homes use natural gas as their primary heating fuel.
AGA Vice President of Energy Markets, Analysis and Standards Richard Meyer said prices are both stable and in line with recent historical trends.
“The return to lower pricing means natural gas bills are expected to decline this winter – even under colder conditions,” Meyer said.
Benson noted that when it comes to customers’ bills, there are factors that could potentially contribute to costs.
“For example, if temperatures are colder or warmer than normal, usage amounts and bills could differ,” she explained.
AGA Senior Market and Regulatory Analyst Morgan Hoy said in the report that utilities use a variety of supply sources to ensure they are prepared to meet customer demand during even the coldest months, helping to ensure energy reliability, especially during extreme conditions.
“Guided by experience and regulatory oversight, natural gas utilities plan natural gas deliveries on a daily, weekly, monthly and seasonal basis by matching supply resources to forecasted demand and preparing for ‘design day’ conditions or historic peak day loads,” Hoy noted.
AGA, which represents more than 200 energy companies that provide natural gas service to 180 million Americans, said its report is built using the U.S. Energy Information Administration’s forecast, which shows home heating prices are expected to decline by an average of 21 percent year-on-year from 2022 to 2023.
Over the past year, AGA’s forecast for this winter reported that the natural gas industry has experienced record-high production, demand and exports while continuing to supply homes and businesses despite changing global demands.
AGA’s report said this year’s outlook is in stark contrast with last year’s steep natural gas production declines that created concerns for customers if supplies could meet demand when record cold temperatures gripped parts of the U.S.
AGA’s 2023 report projects a 45 percent year-on-year decline in U.S. natural gas prices as measured at the Henry Hub.
“Households can save between 34 and 72 percent with natural gas compared to many popular electric alternatives,” the AGA report explained. “Homes and businesses already using natural gas for space heating can further cut costs this winter by 17 percent by installing a high-efficiency gas furnace.”
Still, Benson noted some natural gas customers could experience financial difficulties and need payment assistance this year.
“They are encouraged to visit www.columbiagasva.com or call our Customer Care Center at 1-800-543-8991 as soon as possible to determine what options might be available for their situation,” she said.
She said Columbia Gas offers other assistance programs that feature flexible payment options, budget plans and income-eligible financial support.
“Customers can find out what programs they may qualify for by using our eligibility calculator at www.columbiagasva.com/eligibility-calculator or by calling 1-800-543-8911 to speak with a Columbia Gas representative,” she said.
Additional information can be found at the company’s Energy Assistance Resource Center at www.columbiagasva.com/energy-assistance-resource-center.