Tell me why the rate on my gas bill is increasing even as we have a glut of domestic natural gas

[Orrex]

I don't recall ever seeing an actual decrease in the rate, despite the boom in available natural gas, so where exactly is the money going?

Wasn't "cheaper domestic energay" the whole justification for fracking in the first place?


These are rhetorical questions, of course, because I know full well that the intent all along was to lower production costs in order to boost profits, But couldn't they, just once, be honest about it?


That last one was another rhetorical question.

[zbdent]

1. because they can?

[gratuitous]

2. Congress repealed the Law of Supply and Demand in 2005

Practically unnoticed during the Terri Schiavo incident, Congress also introduced a 10 year moratorium on the "good for the goose, good for the gander" principle.

[Egalitarian Thug]

3. We could, but you alredy know. K&R

[badtoworse]

4. Why don't you call and ask them?

Assuming that it is the commodity cost (i.e. the cost of the gas itself rather than delivery or other charges) that increased, it is likely that your gas company has long term contracts with gas suppliers that were executed at least several years ago when gas prices were rising. Such contracts frequently contain provisions that tie the price of gas to some published standard such the Consumer Price Index or the GDP Implicit Price Deflator. A contract that was signed 5 years ago may have a contract price, with escalation, that is substantially higher than the current spot price for gas which has fallen through the floor.

Gas companies typically use a portfolio approach to buying gas to secure a reliable supply and to protect against volatility in the spot price. The company will have a number of contracts of various lengths - some long term (greater than 10 years), some medium term (around 3 - 5 years) and some short term (6 months - 2 years). The company will also buy some gas on the spot market, but this is risky because the spot price can be very volatile. In 2001, the spot price hit $14 per MCF, whereas today, the spot price is about $2 per MCF. If your gas company has contracts in place, your commodity cost should come down as these contracts roll off and are replaced with contracts based on current, oversupplied conditions.

If you do call them, I'd be interested to hear what they tell you.

[freshwest]

5. The profit motivation. They get it cheap and sell it high. In other words, greed is good.

If you start whining about honesty, fairness, regulation or making things work for everyone, you'll be labeled a heretic to the great American god of capitalism.

You are getting into the region of thought crimes. Watch out, you'll be locked up as a socialist or something.

[badtoworse]

7. Gas company rates are approved by the Public Service Commission in virtually all states.

If there are any exceptions, I'm not aware of them. The gas company can't just charge whatever it wants.

[freshwest]

9. Wrong person.

[n2doc]

6. In Georgia my natural gas rate has gone down about 40% the last 4 years

It has been the only energy related thing that has gone down.

[librechik]

8. hey, it costs money to lobby congress and legislatures

to get subsidies and price increases, while continuing dependence on the dirtiest forms of industrialized energy. The public is going to fight us!!!

[leftyohiolib]

10. why does a dog lick his nuts

this is the age of gouging

[badtoworse]

11. Because he can!

[Snake Alchemist]

12. What state are you in? What has been the change in rate? Mine has gone down significantly. nt

[ParkieDem]

13. That's right - where are you?

In Texas, gas rates have gone down by almost half over the past couple of years. Unlike electricity, gas here is still regulated, and if the general wholesale price of gas goes down, the gas company is required to lower your rate.