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Xcel Energy recommends energy-saving measures in case natural gas prices increase this winter

MINNEAPOLIS - The price of natural gas could be higher this winter heating season in Minnesota compared to last winter, and Xcel Energy urges that customers take steps to reduce the impact of this possible price increase on their heating bills.

Xcel Energy officials say natural gas prices could be anywhere from 1 to 15 percent higher this winter. Numerous factors - including national storage levels and the weather between now and winter - could influence this price in either direction, but the company suggests customers be prepared.

“It’s a good idea to prepare for an increase, and we’re here to help,” said Kent Larson, Xcel Energy’s state vice president for Minnesota, North Dakota and South Dakota. “We want customers to know about measures they can take to better manage their energy bills and reduce the impact if prices do go up.”

Larson suggested that customers consider taking the following steps now before the winter heating season arrives:

• Call 1-800-895-4999 or visit www.xcelenergy.com to request a brochure entitled “60 Ways to Save Money.” Small business customers also can request a “Small Business Guide to Energy Savings” at www.xcelenergy.com.
• Consider utilizing such billing options as the Averaged Monthly Payment plan, which averages out the price of the natural gas bill over the entire year so that payments are more consistent each month.
• Visit Xcel Energy’s Home Energy Analyzer tool and find numerous other conservation tips at www.xcelenergy.com. The interactive online energy audit helps customers to determine how much they can save by taking various energy saving measures around the home.
• Contact Xcel Energy at 1-800-895-4999 if higher prices may make it difficult to pay the bill on time. The company will work with customers to develop an alternative payment plan or refer them to community agencies that can assist them.

Larson said the sensitive balance between natural gas supplies and demand for the commodity this year has made it extremely difficult to predict prices for the coming winter heating season.

“Even though natural gas prices have stabilized somewhat after being higher than normal throughout the spring and summer, supplies are such that an increase in demand could push prices up quickly,” he said. “That’s why we are urging customers to prepare for higher prices.”

Larson said several factors would determine which way prices go this winter.

“If the weather continues to be mild throughout the nation this fall and natural gas storage levels continue to increase, customers could see very little increase in their natural gas bills over a year ago,” he said. “On the other hand, unusually cold weather early in the season or a hurricane in the Gulf of Mexico that interrupts gas drilling and reduces supply could push gas prices higher quickly.”

The commodity price of natural gas is determined on a national basis. Xcel Energy purchases natural gas from suppliers in various states and passes this cost directly to customers. The company makes its profit not from the sale of the natural gas itself, but from distributing the fuel to customers.

The price of natural gas has been extremely volatile in recent years due to dramatic fluctuations in both supply and demand. Xcel Energy mitigates the impact of these fluctuations in the following ways:

• Taking bids for natural gas supplies from more than 35 producers around the United States and purchasing transportation rights from five different pipeline companies.
• Managing the gas supply during times of highest demand, including offering interruptible rates and other rates packages to large customers.
• Using supplies that are injected into storage facilities months ahead of time.
• Using gas price hedging tools to help reduce the level of price volatility in the winter.