Natural gas/Propane

[Kitty]

Has natural gas gone up across the board or is the rate according to states? NC has not been deregulated and we are able to get our supply from one source. THe bills are pretty darned high. I have a copy of the December bill and I cannot tell what the charge per therm is, or even if this is how they calculate the costs. The december bill for the mains store used 2552 therms and the charge was 1946.94 there was a 90.74 credit for "adjustment" then 91.72 excise tax added for a total of $1961.42 What are the natural gas costs in other states?

We have a deal with a supplier of propane, as there are many distributors. We have a rate of cost plus .10 cents with a 99 cent cap. What propane rates are in other states?

[harry]

Check your gas supplier website. They should have gas rate table.
I am here in California. The gas rate changes. Lowest in January and highest in December. I pay big buck in December too.

[Anonymous]

Just got a bill today, it was about 60 cents a therm.

[Kitty]

I went to the website and it looks like we pay 76 cents a therm. Wouldn't this be considered expensive???

[SudsMan]

In June of 2001 I was paying 9 cents/therm. December of 2001, up to 33 cents/therm. I'm now at 64 cents/therm. I'm about to change pricing on all dryers and washers. These prices are for natural gas. Can't directly compare these prices to LP. BTW, there is no shortage of natural gas. But since LP is going up, the natural gas suppliers feel they will raise prices, just because they can.

[Kitty]

9 cents??? You mean 90cents?

[SudsMan]

Nope, not 90 cents, but 9 cents. We were low while the western part of the nation was experiencing very high costs. So now we're joining in on the fun.

[Andy]

I am at $0.417 per therm, up from $0.34 last spring. My supplier has an increase in the works for next month bringing my charges to $0.45 per therm.

[Kitty]

Why are the charges so different per state?

[SudsMan]

It's called greed and unregulation. The supplier can charge what the market will "bear". We can buy gas from several suppliers. I'm looking into this. The gas is still handled by our local utility, but the gas can come from other utilities. Hope this helps, but I have my doubts as to just how much of a savings, if any, I'll see. But hope does spring eternally.

[Andy]

There are many factors which influence the price you pay for ng. The reason the price differs between geographic regions are similar to the reasons you may pay more for a meal in NYC than in Dayton, Ohio.

First, the suppliers will most likely be different, each with their own unique operating expenses. They may or may not have their own wells.

Also, not all states are producing enough ng to supply the demand causing them to be a net importer of gas. Just like any other product if you have to import/transport it further distances, the cost will increase.

Weather and demand seem to play the largest short term role in prices. Obviously , the colder weather causes and increase in demand which will cause the price to increase (econ 101).

Even accidents or distribution disruptions can cause price fluctuations.

[Andy]

Sudsman,

Typically "locking" in the price will just flatten the curve. Meaning you will be protected from very high spikes in prices, but also will be unable to participate in corresponding drops in prices.

It's a gamble

The long term forecasts for the most part call for a steady increase in ng prices over the next 5 to 7 years.

[SudsMan]

Hi Andy, yes, I agree with the way a locked in price can be good or bad. I've never locked in and so far I've come out ahead. It is my thought that the utility has better forecasting on prices than I have. So I don't believe they would, knowingly, offer me a price that would reduce their profit. So far I've been right.

We can buy from about 4 suppliers and that's what I'm looking into. So far the requests for information that I've sent haven't been acknowledged. We'll see. I'll post the information I get, if and when I get it, here.

[mike]

I bookmarked this neat little "energy / price / currency" converter.

I may have got it from someone on this board, I don't remember !

http://www.energyshop.com/energyshop/tools/gj_to_m3.cfm

[mike]

Using that little calculator (converting Cdn. $ / cubic meter to U.S. $ per therm), my price works out to about 51 cents (u.s.) per therm.

[Anonymous]

I've done it with the lock and without, and it usually works out better without the lock. What I have done this year is lock the transportation portion of the commodity but let the commodity float, this seems to be the best of all options.

[PeterH]

.49 cents/therm in Georgia with a marketer that has a special group rate for coin laundry owners and dry cleaners. New reports are that domestic rates are going up to .80+/therm.

[Kitty]

All in all I guess there is not a whole lot that can be done regarding the therm charges here. Not sure deregulation is a good thing either? But it sure sucks when some states pay slightly over half what we pay? Reducing the dryer time really wouln't help out that much and we have currently raised the washers as high as he ic considering to at this point. Not much can be done for the utiltiy costs.

[Anonymous]

It all works out in the end. While rates are high now because of cold weather, the strike in Venezuela and concern about the mid-east, just wait until warm weather in the spring, Venezuela back on line and Iraq over - there will be so much fuel on the market that prices are projected to hit major new lows.

[Fred50]

Don't forget two very important things:

1. Your competitors have to deal with the same utlility cost structure that you do and,

2. If you lock in pricing (buy an option), you are paying a premium for the privilege of the insurance against rising costs. The premium is buried in the spread that you pay over current market
rates. As was mentioned before, you lose on the downside when you lock in.

You look like a genius if rates shoot up and you're locked in, especially if your competition hasn't. The opposite is also true!

[Anonymous]

Mark, while its true that your competitors must deal with the same utility structure that you do, their utility costs may be substantially different than yours based on how each of you make those decisions. What if they decide to lock prices for a 5 year term and you lock them for one year or let them float. In a year or two from now there could be 100% difference in what each of you pay.

The problem is that it is very difficult to make the correct decision, if you could do that then the laundry business is not the business you should be in. I wish I could accurately forecast energy futures, or any futures for that matter.

[Kitty]

Isn't the only way to lock in is when you have a deregulated service area?

[Anonymous]

Y-E-S