News
As Natural Gas Prices Drop, ESP Passes Savings on to Consumers
November 10, 2009
Pensacola, Fla. - As winter approaches consumers of Energy Services of Pensacola (ESP) natural gas can expect to see a drop in rates of as much as 10 percent.
"This is great news for natural gas customers, particularly with the economic situation being as difficult as it is," said Don Suarez, ESP energy services director. "Because we pass the cost of natural gas directly through to the customer, when gas prices decline, as they are expected to do over the winter, our customers benefit directly."
Based on the reduction in natural gas costs, Suarez said customers could see a savings of as much as 10 percent over what they paid last winter.
"If you use the same amount of natural gas as last winter, you might well see your bill fall by 10 percent," he said. "We cannot say for certain what the savings will be, but we feel confident it will be in the range of six to 10 percent."
Natural gas prices are already below the cost of electricity when calculated by the cost per BTU of usable heat produced.
"Currently, the cost of producing one million BTU of usable heat with natural gas is almost $9 lower than the cost of producing that same amount of heat with electricity," he said. "It's likely that difference in cost will only increase in the future."
Suarez said the decline in natural gas prices is a direct result of new technologies opening up previously inaccessible domestic natural gas reserves.
"About five years ago gas prices rose over concerns that domestic natural gas reserves were being depleted and the gap was going to have to be filled with more expensive imported sources," he said.
But the rising prices led to new technologies that opened up previously unaffordable domestic natural gas reserves. As the supply of natural gas rose, prices fell. With the opening of the new reserves, Suarez said there is a real likelihood natural gas prices could remain steady or even drop further over the next two-to-three years.
"We expect natural gas prices to be moderate for the foreseeable future," he said. "As they remain moderate customers of ESP Natural Gas will benefit. With the abundant supply of this clean energy keeping consumer costs down, now is a great time to be using natural gas."
