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12.08.04 Natural gas prices decline Natural gas prices, which remain high, have dropped since November because of warmer-than-normal weather. Customers of the Metropolitan Utilities District are paying 10 percent less for natural gas in December than they did in November. On the other hand, M.U.D.'s December price remains 33 percent higher than a year ago. Prices are higher than a year ago because supplies have remained tight while demand is growing. In a report issued Tuesday, the federal Energy Information Administration said it expects rising prices to moderate slightly because of a jump in the number of wells being drilled and an increase in the amount of liquefied natural gas being imported. The federal energy office credited the recent drop in prices to mild weather and a largerthan-normal cushion of gas in storage. At the new monthly price of 81 cents a therm and given normal weather, the average M.U.D. customer's heating bill for December would be around $130. If December continues to be warmer than normal, bills should end up lower, because customers would use less. Eastern Nebraska's other major supplier of gas, Aquila, also has seen prices drop but not by as much. In the Omaha area, Aquila's price dropped by 5 percent. M.U.D. and Aquila employ different strategies for purchasing gas. That accounts for some of the difference in their prices. Aquila also has to pay stockholders a rate of return and pays slightly higher taxes. Aquila's prices vary by region, based on the cost of serving a particular area. Rural areas are more expensive to serve, which is why, according to Aquila, its eastern Nebraska customers pay more than its Omaha-area customers. Aquila also serves Iowa. For customers of M.U.D. and Aquila, the price of natural gas is set at the beginning of each month for that month. And although December's price is down, that's no guarantee of a trend. Given that the coldest months are ahead, further increases are likely. Customers of Nebraska's other gas utilities, NorthWestern Energy Corp. and Kinder-Morgan, generally pay a fixed price. Kinder-Morgan customers pay one rate for an entire 12 months. That rate varies by community and the pricing plan the customer chooses. Kinder-Morgan serves most of western Nebraska. NorthWestern Energy, which provides natural gas in the Grand Island area, sets one price for the heating season and another for warm weather. This heating season's price is $1.09 per therm and was set at a time of particularly high prices. Claudia Rapkoch, a NorthWestern spokeswoman, said the company is planning a midseason price cut in January if current trends continue. |
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