Natural Gas Price Increase (November 22, 2005)
As your local energy cooperative, we at Lower Valley Energy regret the need to pass on another natural gas rate increase. Effective November 1, 2005, the cost for natural gas increased 26% to $1.66 per therm.
As evidenced daily in the news, it is projected by the Department of Energy (DoE) that heating bills across the nation will be anywhere from a third to fifty percent higher for most families this winter, with the sharpest increases expected for those who heat with natural gas. The chart at right shows the volatility of this market-based commodity and how sharply prices have increased over the last 3 years. Despite the DoE’s gloomy forecast, we predict some drop from the highs this fall that would lead to a rate decrease. Of the 5 rates changes in natural gas at Lower Valley Energy, 1 was in fact a rate decrease.
On a local level, the cost of fuel accounts for 69% of the price we charge our residential members. It is projected that wholesale natural gas prices for the Rockies Index will hover around $12 per thousand cubic feet (Mcf) through the winter’s heavy demand period. This is twice what it cost last winter. We realize this poses some tough spending choices for low-income families and despite our attempts to contain retail fuel costs, heating bills for gas users this winter are expected to be significant.
Lower Valley Energy is a cooperative utility that has met the local energy needs of its members for over 68 years. Once again, we dislike raising rates – ever. In the long term however, we believe wholesale gas rates will stabilize in the $5.00 -$7.00 per Mcf range. While this is still over double the $2.00 per Mcf gas the cooperative began with 8 years ago, it is substantially better than the $12.00 per Mcf wholesale prices the market is currently experiencing. Lower Valley Energy is a cooperative utility – owned by those we serve with any profit returned to its members. We listen and gain direction from our members, we work and serve our members, and we’re here to provide the least expensive, most reliable energy with the best customer service. Please contact us at any time if you have questions about natural gas or any other concern. It is a privilege to serve your energy needs. Return to previous page
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