A rash of cold weather across the country and ongoing production problems in the Gulf of Mexico combined to push natural gas prices to an all-time high this week, which could affect the budgets of many local residents who use the fuel to heat their homes.

Natural gas finished trading Tuesday at $15.38 per thousand cubic feet, a significant jump from the Energy Information Administration’s average price of $6.50 per thousand cubic feet in the winter months of 2004.

According to Wall Street futures analysts, natural gas prices could go as high as $20 per thousand cubic feet if weather conditions do not improve and the country endures a frigid few months. Even a return to average winter temperatures will likely spell an increase this year in natural gas bills for many customers, as last year’s winter weather was especially mild.

The cost of natural gas for the consumer is arrived at based on four principle factors: Production, transmission, distribution and the value of the commodity by the marketplace. Thus people who live in closer proximity to the gas-producing areas of the country will pay slighter less for their fuel.

Still, the old economic maxim of supply and demand is the chief factor in determining prices, which can be influenced by extraordinary market conditions like hurricanes.

Hurricanes Katrina and Rita inflicted heavy damage on natural gas production and transmission facilities in the Gulf states. According to industry information, one-quarter of the region’s ability to drill, process and transport gas to customers is still inoperative.

The Georgia Public Service Commission announced earlier this month that Georgia Power has volunteered, at the request of the commission, to adjust its senior citizen annual income eligibility standard from $12,000 to $14,355 to enable more seniors to take advantage of the monthly $14 discount it offers.

GPSC estimates the change in eligibility standards would allow an additional 23,333 senior citizens to sign up for the discount.

“Given these times of rising energy prices, we are happy to see Georgia Power provide this immediate benefit for those who need help the most,” said David Burgess, GPSC’s Commissioner.

Georgia Power will put the new standard into effect on Jan. 1, 2006. Customers who are eligible can apply at that time.

For more information, call Georgia Power at (888) 660-5890.

React to this story:

0
0
0
0
0

Recommended for you