Volatile natural gas prices could continue into winter
Supply and demand, a turn away from coal, and a war an ocean away are all leading to volatile natural gas prices. The South Dakota Public Utilities Commission says prepare your wallets for winter.
Your energy bills each month are divided into two major pieces – the unregulated wholesale cost of natural gas, and the regulated cost of delivery from energy providers.
PUC Chairman Chris Nelson said it’s the former that’s causing problems.
“Unfortunately, the cost that folks with residence and businesses pay for natural gas to do their heating in the wintertime, most of that cost is related to the actual market cost of the gas, and we’ve seen some real upward pressure over the last two years on wholesale natural gas costs,” Nelson said.
Nelson said those pressures are coming from many areas.
“We’re seeing increased demand for natural gas for electricity generation, as some of the coal-fired power plants we used to rely on for generating electricity are being closed, we’re replacing some of those with natural gas plants," Nelson said. "Secondly as we’re all aware with the Russia-Ukraine situation, some of the natural gas that Europe used to get from Russia is not available.”
Looking towards the winter, Nelson said now is the time to prepare.
“Two things, first from a fiscal perspective, perhaps be preparing to put some dollars away now that might be needed this winter if in fact those gas rates go upwards, and then secondly be looking at what you can do with your home or business to cut your natural gas consumption," Nelson said. "Looking at your insulation levels, looking at ceiling cracks and gaps.”
Lowering the thermostat, upgrading old appliances, and changing furnace filters are all ways to further cut down on your energy bill.