An industrial manometer showing gas distribution pressure in a pipeline
On the same day federal energy trackers predicted a significant decrease in the cost of natural gas, Summit Utilities announced that its 425,000 Arkansas customers can expect smaller bills.
The company, which acquired the Oklahoma, Arkansas and Texas assets of CenterPoint Energy early last year, said Tuesday that with costs dropping across the country, its residential customers can expect a 69.5 cent rate per cubic foot of natural gas, down 43% from last winter’s rate and down nearly 27% from last summer.
Under Arkansas Public Service Commission rules, utilities in the state adjust the cost of gas at the start of November and the start of April each year. Utilities do not profit from higher gas prices.
The announcement from Summit came in the wake of projections by the U.S. Energy Information Administration that natural gas and electricity prices are expected to fall in the coming months as gasoline prices rise.
“We know that high energy costs have created challenges for many of our customers, and we are glad to share financial relief through a reduced cost of gas,” said a statement by Fred Kirkwood, chief customer experience officer for Summit. “We encourage customers who face challenges paying their bills to call our customer service department. We’ve hired an additional fifty representatives since November and our call wait times are below two minutes. Our agents stand ready to set up payment arrangements if customers need them or share information about payment assistance agencies for those that qualify for additional support.”
The EIA, which tracks energy trends in the country and globally, said in its short-term energy outlook released Tuesday that mild winter weather in the first quarter left natural gas inventories 19% higher than the five-year average as the withdrawal season ended in March. At 3.8 trillion cubic feet, natural gas reserves are expected to remain 6% above the five year average.
More: Read the Energy Information Administration’s full report.
Considering those factors, the EIA predicted that the Henry Hub natural gas spot price will average about $2.65 per million British thermal units through the second quarter this year. The full 2023 average natural gas price is expected to remain below $3 per million BTUs, a more than 50% decrease from last year.
On gasoline prices, the EIA cited an April 3 announcement by OPEC and its partner countries that they would cut crude oil production by 1.2 million barrels a day through the end of the year. That could bring the Brent crude oil spot price up to a forecast average of $85 a barrel, up $2 from March predictions. In the same vein, gasoline prices nationwide should peak at $3.50 to $3.60 per gallon now through September, the projections said.
But the EIA outlook also said OPEC’s cuts could be partially offset by increases in Russian oil production, and that “recent issues in the banking sector raise the potential that economic and oil demand growth will be lower than our forecast,” which could push oil prices lower.
Since nearly 40% of U.S. electricity is generated by burning natural gas, according EIA figures, and electricity demand is slightly down, power bills are expected to fall through the third quarter of 2023. “Less demand, along with growing generation from renewable energy sources and lower natural gas prices, significantly lower electric power prices are in our forecast for 2Q23 and 3Q23 compared with the same periods in 2022,” the outlook said.
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