davis_square | NSTAR Gas Bill

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NSTAR Gas Bill

I was just looking at my gas bill from NSTAR and I noticed that last year, we were paying $1.64 per therm in Supply Charges. This year, those charges are 24.1c per therm. That is SEVEN times less than last year. Why was gas THAT expensive one year ago in this area and how can such wild fluctuations be allowed?

Edit: To clarify: this is comparing Aug 2009 with Aug 2008 (the NSTAR bill provides that info).

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You know all that stuff about oil prices (e.g. gasoline, heating oil) and how they fluctuate? Substitute "natural gas" for "oil" and you've got a decent first-order approximation.

I think you're looking at summer versus winter rates. Check the nstar website for info. Also, yes, the winter price of natgas is going to go down for this coming winter. They have to go in front of a state board to do it, though.

you are complaining that prices went down?!

I'm worried about that (I mean, about it reoccurring).

Note: Heating fuel is more expensive in the winter than in the summer, so if you're comparing a bill from May-October now to a bill from November-April last year, the difference would be skewed even further than the above graph would suggest.

And since I always like to throw a little politics into the discussion whenever possible: this is one of the main drawbacks to the United States' refusal to tax energy to any significant degree. In countries where energy is already heavily taxed, economies are set up to treat it like a precious resource, so a doubling or tripling in the price of energy does not have the same impact on people's bottom line. Here in the US where fewer than half of all homes on the temperate parts of the country even have insulation in the walls, and the average car gets well below 30 miles to the gallon, compared to about 40+ in Europe (and not to mention that most people here need to drive to get to work), a wild increase in the price of energy is not only completely "allowed" (to quote from your original post), but it has real potential to bankrupt people in the process...

Are you trying to infer that if energy were heavily taxed, it wouldn't be a burden on the average homeowner because it would eliminate the fluctuations? The way I see it, it would just make the cost of energy HIGH all of the time, which would bankrupt many people and small businesses. At least when it fluctuates you catch a break occasionally to get your head above water.

last year (and we are talking AUGUST 2008, not winter)... I know that oil went way up, but aren't oil and natural gas somewhat decoupled?

Here's an article about the upcoming winter price: http://www.reuters.com/article/pressRelease/idUS174856+15-Sep-2009+BW20090915

According to that article "NSTAR has filed a winter price of $0.7703 per therm, a substantial decrease from last year`s price of $1.2424 per therm. The last time NSTAR`s winter rate was this low was in January of 2003. If the new rate is approved by the Massachusetts Department of Public Utilities, it would go into effect on November 1st. "

"Allowed." Hah.

after the ENRON disaster. MA could do the same for gas. I'm just saying that they could forbid companies from increasing rates sevenfold in one year.

Communist.

LOL! True, but I'm holding on to my gadgets :)

Utilities try to hedge and provide price stability by buying forward on fuel. Actually, in CA (as a former employee of that state's largest utility)the Commission had tried to stop the utilities from hedging on gas because they'd guessed wrong several times and there was public outcry, but without hedging, you are subject to this high price volatility. When gas prices go down, obviously hedging is unpopular, but it misses the point of hedging in the first place.

Hedging is still controversial:
http://www.google.com/search?rlz=1C1GGLS_en-USUS293US303&sourceid=chrome&ie=UTF-8&q=utility+hedging

Sunshine, what did CA do after ENRON, exactly? Did they "reregulate"? I thought they had imposed limits on rates (for electricity) or something like that...

The main problem in CA was that there were caps on the retail prices, but not the wholesale prices. Now there are also caps on the wholesale prices, that the CPUC and FERC issued, and they are fairly high. This generally works because the market is no longer being manipulated by the wholesalers and the utilities instead purchase long-term contracts. However, I think the spot market for wholesale power was recently re-introduced, with a very high cap, so we'll see how well that works this time.

The main point is that there have to be caps on both, neither, or on the wholesalers. Capping it only at the retail level leads to problems.

OK, thanks for clarifying. Obviously, I know nothing about caps. I just find sevenfold price fluctuations within one year disturbing....

It's one thing the NSTAR bill provides...

NStar, National Grid To Drop Natural Gas Rates - http://wbztv.com/consumer/nstar.natural.gas.2.1185133.html

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NSTAR Gas Bill

The short short version

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I think the spike last year was the anomaly...

The price per barrel of crude oil

Re: The price per barrel of crude oil

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Hmmm, no I was saying that prices spiked to absurd levels

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Well, CA put come caps on electriticy cost spikes

Re: Well, CA put come caps on electriticy cost spikes

Re: Well, CA put come caps on electriticy cost spikes

Re: Well, CA put come caps on electriticy cost spikes

Re: Well, CA put come caps on electriticy cost spikes

Re: Well, CA put come caps on electriticy cost spikes

Re: Well, CA put come caps on electriticy cost spikes

I'm comparing it with the SAME month last year (August)...

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