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Xcel Energy proposes September natural gas price

DENVER - Xcel Energy has proposed a 28 percent increase in the September 2006 natural gas commodity price. Coupled with a large expected increase in seasonal use, projected bills would rise next month by 44 percent for typical residential customers and by 43 percent for typical small-business customers.

The natural gas commodity price proposed on Friday to the Colorado Public Utilities Commission (CPUC) would increase to $0.6419 per therm in September from $0.5012 per therm in August. The new price reflects anticipated natural gas costs only for next month and, if approved, would take effect Sept. 1, 2006.

Typical residential customers are expected to increase consumption by 54 percent in September compared to August, so their overall natural gas bills would increase to an average of $29.70, based on consumption of 24.8 therms. This compares to $20.57 this month on use of 16.1 therms.

Typical small-business customers are expected to use 27 percent more natural gas in September compared to August. Typical natural gas bills then would be $145.62, based on consumption of 155.7 therms, compared to bills this month of $101.78 on use of 122.7 therms.

Xcel Energy does not profit from the sale of the natural gas commodity. All costs associated with increases or decreases in the commodity price of natural gas are passed along to customers on a dollar-per-dollar basis.

Residential customer bills would be about 8 percent lower in September than for the same month a year ago. In September 2005, typical residential customer bills were $32.12, or $2.42 higher than projected for next month, based on the same consumption of 24.8 therms.

Typical small-business customer bills are projected to be 10 percent lower than in September 2005. Typical small-business customers bills were $162.40, or $16.78 higher than projected for next month, also based on the same use of 155.7 therms.

Projected natural gas prices for September 2006 are significantly higher than the forecast used for August 2006. The change in natural gas costs appears to be the result of market responses to the warmer-than-normal summer weather, which has required utilities to consume higher amounts of natural gas for electricity generation.

Nationally, summer weather patterns have been warmer-than-normal, with much of the country setting records for high temperatures and energy usage. Storage injection rates have declined as more natural gas has been diverted to current markets.

The U.S. Department of Energy’s Energy Information Administration (EIA), however, still reports higher than historic levels of natural gas in storage. EIA reported that, for the week ending July 28, 2006, there was 2.78 trillion cubic feet of natural gas in storage. This is 360 billion cubic feet more than last year’s level for the same time and 447 billion cubic feet above the five-year average.

Xcel Energy encourages customers to explore ways to conserve energy and lower their natural gas bills by visiting xcelenergy.com/energy savings or by calling 1-800- 895-4999 for a free copy of "60 Simple Ways to Save Money on Your Energy Bill."

Customers also are encouraged to contact the company for information on Averaged Monthly Payment. Business customers may order a free copy of the "Small Business Guide to Energy Savings" on the company’s Web site at xcelenergy.com/businessenergyguide.