When it comes to natural gas, it's 2005 again

Here's some news that will warm your heart (and take some heat off your wallet) this fall as the heating season draws near -- PSE filed today with the Washington Utilities and Transportation Commission to reduce natural gas rates by 17 percent for all classes of business and residential customers.

Homeowners will see a 16 percent drop -- a rollback that puts natural gas prices back to 2005 levels.


Why is this happening? The simple answer is that when it comes to the actual natural gas that comes to your furnace, water heater or stove, we can only charge you what we pay for it -- and the price we pay in the wholesale world for natural gas has dropped sharply. In fact, this drop in natural gas prices (which will take effect October 1 if approved by the UTC), follows a drop in June. We are allowed to make a profit on the cost of the infrastructure needed to deliver the gas (pipes, pumping stations, storage facilites, etc.) but not on the actual gas. That's at "market price."





Last year, natural gas markets rose dramatically, along with the market price for petroleum products, and as a result we had a wallet-walloping combo of record cold winter weather and very high natural gas prices. This year, in large park to the slumping world economy, natural gas prices fell back to levels about where they were in 2005.





Here's where a little good-planning on PSE's part came in: we have a gigantic underground natural gas storage facility called Jackson Prairie in Lewis County (pictured above). This site, a huge natural cavern, empties out over the winter heating season -- allowing us to buy cheaper summertime natural gas, and then pump that gas to you during our colder winter months rather than buying natural gas "as needed" during the winter when prices are high. This video gives a nice look at how the whole natural gas system works.



So, enjoy what should be easier heating bills this winter (and, if El Nino develops as expected, an easier winter as well) thanks to the reduced cost of the natural gas in today's filing.



Conservation is still a good bet as well, with PSE offering rebates for new, efficient natural gas furnaces. Jumping on that sooner rather than later would be smart as current federal tax credits for energy efficiency expire in the next few weeks.