Tuesday, June 10, 2008

Natural Gas Prices Highest June Ever

gas prices posted for June are not only the highest of the year, they're the highest in history — higher even than in the record-breaking months that followed Hurricane Katrina in 2005.

Katrina, followed by Hurricane Rita, battered Gulf Coast gas supplies that September.

The next month, the per therm price charged by marketers jumped to between $2.20 and $2.55 per therm — figures so high that the state Public Service Commission rushed to allocate aid to the poor and elderly.

This month, gas marketers variable prices ranged from $2.88 to $3.33 per therm.

Fixed prices are also up over the post-Katrina months, although not as dramatically. The figures are the apples-to-apples prices that the PSC uses, and include all fees.

The retail prices are based on much higher wholesale prices for natural gas.

The steep climb in wholesale price coincided with the soaring price of oil and gasoline and is likely partly linked to it.

Struggling with prices at the pump, most customers haven't yet noticed the natural gas problem because they're not heating their homes and therefore not buying that fuel in volume.

Because electric companies lean on natural gas-fired plants in the summer, prices are unlikely to drop until the fall, which is the other traditional time to lock in rates.

And it's anybody's guess what will happen even then.

Gas companies traditionally store relatively cheap gas for the winter at this time.

They're now storing high-priced gas instead.

Keith Poston, a spokesman for AGL Resources, parent of Atlanta Gas Light and Georgia Natural Gas, said wholesale gas prices are up 118 percent over last summer.

"It's not shaping up to be a good year right now," he said.

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