Over the last two decades, the share of natural gas in the energy mix has dramatically increased. A large driving force behind this increased natural gas is for electric generation. Electric power plants that were previously fueled by coal or nuclear power have transitioned to natural gas as it is a cleaner-burning, competitively priced, and efficient fuel. According to the U.S Energy Information Administration, in 2016, about 33% of the electricity came from natural gas utility generation.
Multiple entities are involved with delivering natural gas from the point of production to your business. Production companies explore, drill and extract natural gas from the ground.
Transmission companies operate the pipelines that link gas fields to major consumption areas, and distribution companies are the local natural gas utility that delivers to the customer.
Average natural gas prices can vary greatly between states and cities. Some of the variance in prices can be contributed to the distance a consumer is from the areas producing natural gas, transmission pipeline capacity, customer demand, and state regulations. Like other supply and demand situations, there are many additional factors that cause prices to fluctuate
As your PMC account manager is performing routine examination of your account information, on occasion there may be instances for your company to take advantage of different classifications, such as a natural gas delivery rate change. As part of this process, the account manager will work on your behalf to contact the gas utility, obtain the paperwork required for the client to make the switch to the more advantageous rate, and submit the application to the utility on behalf of the client.
Our team of energy experts is knowledgeable about all of the supply and demand variables that affect natural gas. We work day-in and day-out with suppliers to compare options on your behalf and search for ways to reduce your energy costs.
“With so many companies offering energy services, I wanted to be sure I chose a trusted partner for my company. Power Management’s history, knowledge of the market and impressive client portfolio attracted me to them. The solid relationship I’ve built with them over the years has proven extremely valuable.”
Because demand for natural gas fluctuates daily and seasonally, underground storage of natural gas is an integral component of the nation’s energy system. The natural gas storage reserves enable utilities to offer consumer reliable service and the opportunity for more constant prices throughout the year. Storage of natural gas during periods of low demand helps to ensure that sufficient supplies of natural gas are available during periods of high demand.
Natural gas storage reports are released weekly and provide information about working gas volumes held in underground storage facilities at the national and regional levels. Changes in these numbers primarily reflect net withdrawals or injections for the week and can have an impact on natural gas prices.
For the most part, gas is injected into storage during periods of low demand and withdrawn from storage during periods of peak demand. The markets monitor these figures because inventory data can indicate supply and demand trends. If the increase in natural gas inventories is more than expected, it implies either greater supply or weaker demand; likewise, if the increase in natural gas inventories is less than expected, it implies either weaker supply or greater demand. The EIA report shows the net change of overall natural gas inventory levels as well as the inventory levels in regions for the current and previous week. It also provides inventories for the same period last year and the five-year average for historical comparison in order to compare natural gas prices.
The NYMEX (New York Mercantile Exchange) is a commodity futures exchange widely used as a benchmark price for natural gas. Natural gas futures prices are based on delivery at the Henry Hub in Louisiana. Depending on your location, you may have an additional basis cost for transportation. Natural gas futures allow market participants to protect their buying positions in order to manage risk in the volatile natural gas market. Below you will find a chart with the NYMEX settlement from 2005 to date which is a vital component to the overall price your business will pay for natural gas:
Your natural gas utility supports energy competition and encourages customers to choose an energy supplier that is right for them. You may be asking yourself, which natural gas suppliers near me will provide my business the best value? As noted, there are many variables that go into the price of natural gas. Power Management provides market knowledge, strategic direction and the ability to leverage our strong relationships with nationally recognized and financially sound energy suppliers, to obtain the most competitive pricing and provide you with an all-inclusive approach to best manage your energy costs.