Natural Gas Price Volatility Returns With a Vengeance
Endorsed Partner | Reliable Energy
For the last decade or so, consumers have enjoyed the benefits of consistently lower prices on natural gas. Prices were set at roughly $3 per thousand cubic ft and at times even lower (can someone say pandemic?). It seemed like the days of $10+ prices were gone forever. Unfortunately, times have changed, and we are now living through the most volatile stretch the U.S. natural gas market has ever seen with prices fluctuating daily. Once again, prices are knocking on the door of $10.
Perhaps the most concerning part about this recent spike is the realization that high prices like these could stick around for a while. In the past, producers of natural gas were quick to respond by increasing exploration and drilling efforts. However, those same investments have not been made on the supply side of the equation this time.
Perhaps the most concerning part about this recent spike is the realization that high prices like these could stick around for a while. In the past, producers of natural gas were quick to respond by increasing exploration and drilling efforts. However, those same investments have not been made on the supply side of the equation this time.
A ~10 yr. run of lackluster pricing has led to a shortage of equipment, materials, and labor. The impact of the pandemic and continued supply chain issues certainly do not help in that regard. Higher prices for natural gas could also have something to do with the fact that the fossil fuel industry has been told flat out it is being targeted for extermination. Would you invest in growing your output under those circumstances? Or, as most of the big energy companies have done, would you shift gears and allocate your future investment dollars to green, renewable forms of energy? And of course, there are some who would have us believe that recent events happening across the globe are to blame, but this is likely not a major factor as it relates to near term U.S. natural gas pricing. Regardless of the reason, the fundamentals that drive pricing have clearly changed leaving consumers exposed to higher payments and extreme market volatility.
Now more than ever, it is crucial for consumers to evaluate their utility rate options and identify ways to combat these increases. Most regulated natural gas utilities, including Michigan’s four largest Investor-Owned Utilities (IOUs), offer their customers the ability to “freeze” rates for a set time without leaving the utility. It is simply a matter of contacting your natural gas provider to secure a fixed rate instead of taking service under their default rates which are subject to change monthly.
Now more than ever, it is crucial for consumers to evaluate their utility rate options and identify ways to combat these increases. Most regulated natural gas utilities, including Michigan’s four largest Investor-Owned Utilities (IOUs), offer their customers the ability to “freeze” rates for a set time without leaving the utility. It is simply a matter of contacting your natural gas provider to secure a fixed rate instead of taking service under their default rates which are subject to change monthly.
Please note that each of Michigan’s IOUs recently filed for emergency rate relief so customers currently on default rates should expect significant increases in the coming months - right when use starts to pick up for the winter. These changes might be cause for concern, but the good news is there are steps you can take to minimize your exposure and Reliable Energy is here to help. Our expert evaluation of your current utility rates and options is available at no cost and with no obligation. As an Endorsed Partner of the MRLA, we extend our support to members and invite you to take advantage of this offer!
Contact Pam Sawatzki at the Michigan Restaurant & Lodging Association, at [email protected] or 517.702.3940 to get your quote started.
