Natural gas price falls to '97 level

Columbia Gas sets rate for September 26% lower than 2011's

8/31/2012

As stormy weather rages through the Gulf of Mexico coastal region, Columbia Gas of Ohio Inc. announced its natural gas price for September. But unlike past years when a hurricane or tropical storm would cause price increases, natural gas rates will decrease next month.

The gas utility's standard offer for September will be 42 cents per hundred cubic feet, marking the lowest September rate for Columbia Gas customers since 1997.

The rate, which is 26 percent lower than Columbia Gas' September, 2011, rate of 57 cents per hundred cubic feet, is based on the latest natural-gas closing price of 26.3 cents on the New York Mercantile Exchange, plus 15.3 cents for a state-regulated service fee.

The September rate will be 3 cents lower than this month's rate of 45 cents per hundred cubic feet.

When Hurricane Katrina struck the Gulf Coast in 2005, natural gas rates for Columbia Gas customers rose as high as $1.36 per hundred cubic feet because the utility received the bulk of its natural gas from wells based in the Gulf.

But in the seven years since then significant growth has occurred in the amount of gas supplies produced in noncoastal areas, specifically from the shale-gas regions of eastern Ohio and western Pennsylvania, Columbia Gas officials said.

Utility officials said the increased natural gas production in Ohio and Pennsylvania has sharply reduced the impact Gulf hurricanes can have on gas prices, and the reduction in prices despite disruptions by Hurricane Isaac bear that out.