(The following press release from the State of New York Public Service
Commission was received by e-mail. The sender verified the statement.)
Natural Gas Utilities Ready For Winter Heating Season
Natural Gas Commodity Prices Expected to be Slightly Higher Than Last Year
Based on an annual review of local utilities’ winter preparedness, the New York
State Public Service Commission (Commission) today announced that utilities
providing natural gas service in the state have adequate supplies, delivery
capacity, and storage inventory to satisfy customer demand under severe winter
conditions. While bill impacts will vary by utility company, customer bills in
general are predicted to increase only slightly this winter; however, they
remain much lower than what they were several years ago.
“As more and more customers turn to natural gas for their heating needs,
ensuring a reliable gas supply remains a paramount concern of the Commission,”
said Chair Audrey Zibelman. “Our analysis indicates that utilities serving New
York have adequate supply and inventory to satisfy expected demand this
As part of the annual winter readiness review, Commission staff provided a
report to the Commission regarding the arrangements utilities have made to
obtain adequate commodity supply to meet expected customer demands under severe
winter conditions. Additionally, staff reviewed the utilities’ compliance with
Commission policy regarding gas purchasing practices. Special attention was
given by staff to the methods utilized by the utilities for gas price risk
management efforts, including the use of hedges (i.e., storage gas and fixed
price contracts) and financial incentives, such as futures and options.
The Commission’s assessment of natural gas supplies and prices is based on
staff’s monitoring of utilities’ actions to prepare for the winter. Throughout
the winter season, staff will monitor issues that could potentially affect the
utilities’ operations and their customers, such as weather and heating degree
day data; storage inventory management; interstate pipeline operational issues;
operational flow orders; utility operation issues; gas price levels and
fluctuations; and customer interruptions. Staff will report to the Commission
if a problem develops, or if action is warranted.
As of October 1, 2013, the price of flowing gas for the upcoming heating
season, reported on the New York Mercantile Exchange, is projected to be higher
than last year. In the current price environment, commodity costs make up
between 25 to 45 percent of the customers' bill and as a result, total bills
are expected to increase by slightly more than 3 percent, or about $6 a month
during the heating season. However, while average customer bills might be
slightly higher than last year, bills are anticipated to be about 6 percent
lower than the historic three-year average.
In New York, there are about 3.9 million natural gas heating customers. About
half of the households in the state use natural gas for heating purposes and
residential customers constitute the majority of natural gas customers. The
Commission regulates natural gas delivery rates and not the price of natural
gas itself, often referred to as the commodity price. Natural gas prices are
determined by national markets, not the Commission or New York utilities.
For information on how to lower energy costs this winter, call the Commission’s
information line at 1-888-Ask-PSC1 (1-888-275-7721), or visit the Commission’s
Web site at www.AskPSC.com. If you have difficulty understanding English,
please call us at 1-800-342-3377 for free language assistance services
regarding this press release.
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