Soft Natural Gas Shows Up at Home

November 27, 2012 07:15 AM

Natural gas pricing has had a dramatic effect not only on the farm, but also in the farmhouse. Natural gas accounts for the majority of the costs for home heat and annual increases to suppliers can cause the price of home heat to spike. But this year, things are a little different.

The Iowa Utilities Board has just approved a settlement with Interstate Power and Light Co to increase IPL's annual natural gas service revenue requirement. The natural gas rate case filed by IPL was the company's first in seven years and is designed to recover more than $70 million in infrastructure investments made to the natural gas distribution systems since the last case.

Normally, consumers would expect to see an uptick in home heat expenses and other natural gas related utilities. In this instance, infrastructure improvements and repairs are needed to the tune its a gas 4of $70 million. Usually, that cost is factored in to the consumer's bill, and the cost of heating and cooking moves upward -- but that is not how it shakes out in this case.

"We are pleased at the outcome and appreciate the effort of all parties to come to a settlement that the Iowa Utilities Board could approve," said Tom Aller, President-IPL. "With this settlement, the Cost Management Plan, and low natural gas prices, our customers will continue to benefit from some of the lowest natural gas costs in years."

The cost of gas makes up, on average, 60 to 70 percent of the average residential natural gas bill. Because of lower gas costs, the average current residential bill is down nearly 20 percent since IPL's last rate case in 2005. This will serve to mitigate any increases the new deal might incur.

In other words, the price of energy went up, as it does, but the cost of natural gas is so low that consumers are actually seeing their monthly heating and cooking expenses drop. With forecasters suggesting a warm, dry winter across the Midwest, utility bills -- thanks to soft natural gas -- are likely to be something to smile about this winter.


Photo credit: sidewalk flying / Foter / CC BY


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