Officials at National Fuel Gas Distribution Corp. have been thinking about, and preparing for, the upcoming winter for months. On the heels of the coldest Western New York winter in more than 70 years, National Fuel has good news for its customers. Based on the current forecast, customer bills are likely to decrease this winter by approximately 20 percent from last winter's heating season, provided there is a more "normal" "Buffalo" winter.
A home heating bill is determined by two main factors: the price of each unit of natural gas and the amount of gas used.
The price of each unit of gas used includes gas supply charges and delivery service charges. Delivery service charges reflect the utility's cost of delivering safe, reliable natural gas and represent the costs of providing service. The price the utility pays for gas supply is determined by market forces (commodity pricing) and is passed on to customers through gas supply charges without mark-up, as National Fuel cannot, by law, make a profit on gas purchased and then sold to its customers.
During the winter heating season of November through March, the average home in Western New York uses 736 CCF of natural gas, though this can vary depending on the size, age and condition of the home. This year's average winter heating season bill is predicted to be $648. Last winter's average customer bill totaled $808 in a winter that featured a polar vortex with extreme and prolonged cold temperatures which were 13.3 percent colder than normal temperatures. Translated in dollars and cents, customers could expect their heating bill could very well be $160 lower than last year.
National Fuel customers can credit the forecasted favorable savings in their winter heating bills to a "perfect storm" consisting of a great location within close proximity to the Pennsylvania shale play, National Fuel's efficient and cost-conscious gas procurement processes, abundant pipeline infrastructure, capacity to deliver gas reliably and consistently in frigid weather, and the growing importance of gas storage within the New York service territory.
The utility has a variety of natural gas supply sources and uses a combination of proven methods that allow flexibility to adjust purchases - including forward pricing, monthly pricing and daily pricing all combined with both supplier and basin diversity.
"National Fuel's gas supply management team builds and manages a portfolio of supply sources, storage and transportation services, which include a diverse set of contractual and pricing arrangements that translate to real savings for our customers as we purchase natural gas at the best possible cost," Merkel said. "Our customers were insulated from last winter's spot market gas cost increases experienced by many cities across the Northeast because of the utility's ability to purchase and store lower-cost gas."
Because of utility efficiency efforts, gas delivery service charges paid by National Fuel customers haven't changed in more than seven years as initially approved in 2007, and re-approved in 2014 by the New York State Public Service Commission. The only increase in customer bills, on the delivery side, has been a result of additional state-mandated taxes.
For customers who want to have level, predictable month gas payments this winter, National Fuel suggests budget plan billing as a way to stabilize monthly heating bills. Numerous programs are available to help individuals who struggle to make their payments. Information is available on the utility's website at www.nationalfuelgas.com.
The Home Energy Assistance Program opens Monday, Nov. 17, and is contingent on available federal monies. This program accepts applications based on income guidelines, and funds are distributed on a first-come, first-served basis. For additional information, visit www.HEAPhelps.com or call 1-877-443-2743.
Customer service can provide information on the following programs: "Neighbor For Neighbor" heat, low-income customer affordability assistance program, a deferred payment agreement, special protections, as well as National Fuel's conservation incentive program.
National Fuel offers additional energy savings tips at its conservation incentive program website at www.nationalfuelforthought.com to help customers manage energy usage and bills during the cold winter weather.
To learn more about natural gas safety, visit www.NationalFuelGas.com.