The monthly natural gas price for residential customers who are on the Standard Choice Offer is going up slightly for the month of December, but is still lower than the average winter price in previous years.
Effective Dec. 14, the SCO will be $3.18 per thousand cubic feet (mcf). Though higher than the previous December rate of $2.23/mcf, the December 2016 rate is still lower than the $4.45/mcf December average for the years 2011 to 2014, said Jeff Murphy, Dominion East Ohio vice president and general manager.
Abundant regional shale natural gas supplies will help Dominion East Ohio customers face an expected return to colder temperatures this upcoming winter, at prices projected to be lower than the average of the past five heating seasons, officials say.
Murphy said a review of current New York Mercantile prices, for January through March 2017, indicates that average monthly natural gas prices would be in the “low to mid-three dollar range per thousand cubic feet (mcf).”
Murphy notes that those NYMEX prices can, and often do change, based on actual weather and other market factors. However, based on current conditions, these price projections are still lower than Dominion’s five-year winter price average of $3.81/mcf, covering the 2011 to 12 through 2015 to 16 heating seasons.
Murphy said average monthly prices will likely be higher than last winter’s unusually low prices, which resulted from a unique combination of warmer-than normal weather, increased production from shale areas in Ohio and other states and historically high storage levels.
“Last year was an anomaly,” Murphy said. "Record storage levels and strong natural gas production collided with reduced demand created by much warmer-than-normal weather. This caused market prices to crater to decades-plus low levels. It was a classic case of the law of supply and demand in action.”
Even though natural gas storage levels are very high, reduced drilling brought about by low prices and an expected return to colder seasonal temperatures, has resulted in higher, though still moderate, market prices, Murphy said.
The location of Dominion East Ohio’s system, astride Ohio’s major Utica and Marcellus shale production regions, is helping moderate price increases for company customers, Murphy said.
“Our location so close to some of the fastest growing production areas in the country provides greater supply reliability and ensures that Dominion East Ohio can provide sufficient natural gas when our customers need it most.”
The SCO is a monthly rate determined by a state-approved formula.
All Dominion East Ohio residential customers also pay two charges directly to Dominion, regardless of their supplier to pay for delivery and other utility costs.
Customers pay a fixed $26.16 for the basic monthly charge and a usage-based charge.
Click here to learn more about the SCO, which consumer columnist Betty Lin-Fisher continues to recommend.