By ROSALIE RAYBURN Journal Staff Writer
Just about everyone has seen the heating bills skyrocket in recent years. That’s because increased demand and tight supplies have caused market rates for natural gas to triple since 2002. And by law, utilities pass those costs on to customers without a markup.
Most New Mexico residents are getting a better deal this winter than residents of Colorado but pay slightly more than people in Arizona. As for Texas, it depends on where you live. Houston residents pay more to stay warm than people in El Paso.
Of course the bill ultimately depends on the severity of the climate: Colder weather equals higher bills.
For example, the average household heating bill in balmy southern Arizona is less than $90; it’s more than $150 in Albuquerque or about $250 in parts of Colorado.
Here’s a breakdown on how our natural gas bills compare to others’ bills in the Southwest. Figures include the cost of gas plus the delivery charge to bring it to the consumer. They exclude taxes, franchise fees and service charges.
New Mexico: Public Service Company of New Mexico’s price for natural gas in January is 98 cents per therm. Customers also pay a 19.27 centsper-therm delivery charge. At that price, the average residential bill for 131 therms of gas will be $154.
Arizona: Northern Arizona communities such as Flagstaff and Prescott, which get gas from Unisource Energy Services, will pay a total of $1.12 per therm for gas and delivery. Average January bills will be $116.48 for 104 therms of gas.
In southern Arizona, customers of Southwest Gas living in Tucson or Phoenix pay far more per therm — but use only an average of 73 therms a month. January gas bills will average $80.35.
Colorado: Colorado Natural Gas, which supplies Cripple Creek west of Colorado Springs and rural areas north and west of Denver, charges a total of $1.48 per therm. Average residential customers who live at altitudes of 7,000 to 9,000 feet typically use 171 therms of gas in January and see bills of over $250.
Xcel Energy, which supplies cities such as Denver, Boulder and Vail, charges $1.12. Average bills in January will be $165.
Texas: CenterPoint Energy, which supplies cities such as Houston, Beaumont and Laredo, charges $1.69. For average January gas use of 100 therms, bills will be $169.
Texas Gas Service, supplying El Paso, does things a little differently. It charges 87 cents per therm for gas and customers pay a flat $10.13 per month service charge. Average January bills will total $114.53.
Buying gas
Regulators in all the states allow utilities to make money on what they charge to carry the gas through their pipeline networks and deliver it to the customer.
Utilities say they’re continually tweaking strategies to secure the best price for their customers. But overall, increasing demand and limited supplies mean higher prices are here to stay, industry analysts say.
A utility can help ease the pain by spreading the risk when market prices are volatile. PNM has a department dedicated to securing a diversified portfolio of short- and long-term gas contracts to help keep prices down. PNM has 460,000 gas customers.
Raton Natural Gas with 3,500 customers and Zia Natural Gas with 22,000 say they’ve found it increasingly difficult to compete against large companies for reasonably priced gas contracts.
Changing market
Utilities have faced radically changed market conditions since the mid-1980s, when gas prices were deregulated. From the mid-1950s to the mid-1980s, gas prices were set by federal regulators. Deregulation helped attract more investment into production and brought lower prices in the late 1980s and throughout the 1990s, said Federal Energy Regulatory Commissioner and former New Mexico state regulator Suedeen Kelly.
During that period, gas prices typically rose in the winter in response to higher demand for home heating fuel. Prices fell during the summer.
Utilities took advantage of the seasonal price variation by purchasing winter supplies during the summer when the price was low.
That pattern has faltered over the past five years because demand for gas has increased while production has steadily fallen behind, Kelly said.
The reason: Gas has become the fuel of choice for power plants because it results in fewer emissions than coal. Utilities normally run gas plants during the summer to meet demand for air- conditioners. As a result of this summer demand, the seasonal difference in gas prices is gradually disappearing. Unless consumers reduce their demand or alternative sources of energy are developed, prices will likely remain high, Kelly said.
“It’s a very serious national situation,” she said.
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