A Warmer Winter Will Mean U.S. Natural Gas Customers May See Lower Bills
Washington, D.C. – The American Gas Association (AGA) said today that customers nationwide may see residential natural gas bills 7 to 11 percent lower on average than the previous winter, due to expectations of a warmer-than-normal winter. Additionally, AGA says increased natural gas production nationwide may be changing how the market uses natural gas storage.
“As natural gas utilities prepare for another winter heating season, record levels of production are offsetting lower storage inventories in the supply mix while prices remain low and stable. We continue to see robust supply that is well positioned to serve customer needs. These trends could speak to an evolution of how utilities and others make strategic use of natural gas storage,” said Richard Meyer, AGA’s Managing Director of Energy Analysis.
AGA held its 2018-2019 Winter Outlook event today, which focuses on supply, demand, storage, temperatures, weather events, pipeline capacity and potential impacts on customer bills. Meyer and AGA Senior Energy Analyst Brendan O’Brien presented their findings and methodology.
“AGA asked its members what their expectations were for the winter heating season with 74 percent responding that bills this winter will be the same or lower than last year,” said O’Brien. His presentation also noted that:
- On January 1, 2018, natural gas utilities set a new 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.
- Natural gas will continue to be the lowest-cost energy option for home heating.
- Expectations are for a warmer-than-normal winter based on National Weather Service 2018-2019 Winter forecast (3,713 HDD vs 3,816 normal HHD)
- EIA’s winter forecast for Henry Hub price of gas remains on target with five-year average winter price ($3.32 vs $3.18).
The American Gas Association, founded in 1918, represents more than 200 local energy companies that deliver clean natural gas throughout the United States. There are more than 75 million residential, commercial and industrial natural gas customers in the U.S., of which 95 percent — more than 71 million customers — receive their gas from AGA members. Today, natural gas meets more than three-tenths of the United States' energy needs.