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Frequently Asked Questions - Natural Gas
Following are the answers to some questions that are asked quite
often. If they don't hit on what you need to know, or if you'd like
further information, contact us.
- Why are natural gas prices so high?
- Natural gas prices are rising for the same reason
the price of many other goods tends to rise: it's called "supply and demand." The
amount of natural gas our country produces and uses is closely linked to the price of
the gas. If the supply or demand for natural gas changes, a change in the price of the
gas follows. Sometimes, even news about the supply of natural gas can cause its price
to change.
Over the past several years, the price of natural gas has risen steadily. That's
because the use of natural gas has increased, but the supply hasn't increased at the
same rate. Natural gas is popular for cooking and heating, and more power plants use
gas to produce electricity. In addition, changes in weather can create short-term
increases in the demand for gas.
Despite rising prices, natural gas is still a good value. It's important to remember
that the price of other fuels has risen as well. Many companies and organizations are
working to make more natural gas available for the future, to keep costs affordable.
One example is President Bush's recent Energy Bill, which encourages exploration of
new natural gas sources.
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- How did hurricanes Katrina and Rita affect natural gas prices?
- Many of the country's gas rigs, which drill for
natural gas, are located off the coast in the Gulf of Mexico, where hurricanes Katrina
and Rita occurred. So it is true that the hurricanes stopped natural gas production and
increased the cost of natural gas through this coming winter. But the hurricanes alone
don't account for the gas prices that are being predicted for this
winter.
At Wisconsin Public Service, we purchase much of our gas from Oklahoma and Canada - not
from the Gulf Coast. We also purchase a large amount of our winter supply of natural
gas during the summer months, before the hurricane season, and place the gas in
storage. That gas is mixed in with gas at the current prices, and helps manage the
costs our customers pay.
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- What is Wisconsin Public Service doing to keep natural
gas costs down?
- Like you, Wisconsin Public Service doesn't like to
see high natural gas prices. We know high costs are difficult for our
customers.
To help manage the effect of higher natural gas prices on our customers, we take the
following steps:
- To prepare for winter heating seasons, we purchase the amount of natural
gas that we are physically able to store (about one-third of our natural gas
supply) during earlier months of the year - when natural gas prices are typically
lower. These supplies are kept in storage until they're needed.
- We also avoid buying natural gas daily because of the volatility of the
price. We buy natural gas in monthly blocks, locking in the price at the beginning
of the month. This helps moderate price spikes caused by unexpected events such as
supply problems or increased demand caused by extreme cold weather that occur within
a month.
- Like other utilities, we don't mark up or profit from the price of natural
gas. Our customers pay exactly what our company pays for the gas. We charge directly
only for the delivery of the gas over our pipeline system, and we have been able to
keep those charges low. In fact, the cost of gas delivery has risen at a rate that's
significantly below the rate of inflation.
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- What can you do to manage your higher natural gas bill?
- There are some simple steps that customers can
take to help manage their energy use and costs, including:
- Use energy more efficiently - Before the winter, customers should take
steps to insulate windows, install programmable thermostats or add insulation.
Additionally, lower your thermostat during the heating season and remember to
change or clean furnace filters monthly. Learn more about your energy charges and
what you can do to manage costs with
All About My Bill and
Energy-Saving Tools & Ideas.
- Find a payment plan that works for you - Public Service offers a
variety of billing & payment options,
including Budget Billing, which allows customers to pay an average bill monthly
instead of seasonal high and low monthly bills. If you are already a Budget Billing customer, please be assured that the higher
natural gas costs are already being factored into your monthly budget bill amount
due.
- Ask about help with home heating bills - Help is available for low- and
fixed-income customers who are having difficulty paying their heating bills. Find
out if you're eligible for
heating assistance
offered through your state.
- Look for the STAR - If you are thinking about purchasing new natural gas
appliances, make sure to look for the ENERGY STAR label to ensure that you are
buying an energy efficient appliance. You can also visit
www.focusonenergy.com
to find out about possible financial incentives and additional assistance programs.
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For additional information on natural gas prices and how to manage rising energy
costs, you can visit the state of Wisconsin Governor's Energy Help Initiative Web site at
www.energyhelp.wi.gov.
