As natural gas utilities prepare for the upcoming winter heating season, record levels of production are offsetting lower storage inventories, while prices remain low.
Robust supplies, which includes produced gas, storage inventories, imports from Canada, and liquefied natural gas, mean the market is well positioned to serve customer needs this winter.
The American Gas Association (AGA) released its 2018-2019 winter outlook. It examines customer bills and how market elements like supply, demand, temperature, weather events, and pipeline capacity may impact costs to consumers this winter.
Based on an AGA survey of natural gas utilities and other factors, AGA expects the average customer gas bill to be 7 to 11 percent lower than the previous winter. Seventy-four percent of the gas utilities surveyed say they do not predict an increase in residential heating bills this season.
The following are factors that are contributing to the decrease in customers natural gas bills:
- A warmer-than-normal winter based on the National Weather Service (NWS) 2018-2019 Winter forecast (3,721 HDD 3,816 normal HDD)
- Winter forecast for Henry Hub cost of gas remains close to 5-year average winter price ($3.32 2018-19 forecast a 5-year average of $3.18)
- 3 percent annual reduction in normalized use per customer due to ongoing energy efficiency since 1970
- Steady improvements in end-use energy efficiency
- Abundant production to meet supply and peak demand concerns
Natural gas utilities deliver significant amounts of energy when consumers need it most. On January 1, 2018, natural gas utilities set a record for a peak-day delivery of natural gas to consumers. The amount of natural gas delivered to just residential homes and commercial businesses on that day is roughly equivalent to the energy that nearly the entire fleet of U.S. power plants could generate running at full capacity for 24 hours.
The market appears well supplied and ready to meet consumer needs this winter. Once again, natural gas continues to be lowest-cost energy option for home heating in the US.
