Mild weather combined with robust natural gas supplies locally and nationally, mean this winter’s heating costs for the average New Mexico family will be about the same as last year, said Gary Murray, director of gas supply for the New Mexico Gas co.
Prices have remained at record lows for most of the last decade, thanks to the shale-gas revolution that has pushed domestic production to its highest level in U.S. history. That’s meant affordable warmth for New Mexicans during most winters since 2009.
“Natural gas prices right now are about the same as this time last year, maybe even a slightly lower by a couple of pennies,” Murray said. “If the mild weather holds, we expect overall bills to be quite similar to last year.”
In November, average consumer prices for natural gas remained at 36 cents a therm, or less than half the 88 cents a therm New Mexicans were paying in 2008, before the shale-gas boom began.
“We haven’t finalized the December price yet, but the prevailing rate now is 38 cents a therm,” said company spokesman Tim Korte.
Last winter, the average New Mexico heating bill was $99 in January, $83 in February, and $67 in March.
“Those are good starting points to estimate bills this winter as well,” Murray said. “People turn their thermostats up or down as the weather climbs and falls, but based on what we see now with the weather, we don’t project any big swings.”
“There’s a lack of cold weather coming into the state,” said company gas supply manager Josh Tilbury. “Forecasting for December-February is also for above-normal, or warmer-than-normal temperatures.”
That could change with unforeseen weather spikes. But overall, this year is looking like a repeat of last year’s mild winter. Murray said.
Higher prices have no impact on company profits, which instead come from delivery of gas to customers. By law, the utility simply passes through the cost of fuel on customer bills.
While consumers nationwide are benefitting from robust supplies, national gas storage is currently about 3 percent below normal. But it would likely take sustained below-normal storage levels of 5 to 10 percent to impact prices, Murray said.
New Mexico Gas customers also benefit from proximity to the San Juan Basin in the Four Corners area and the Permian Basin in southeast New Mexico and West Texas. All the gas distributed by the company comes from those basins.
New Mexico Gas, owned by Canadian firm Emera Inc., is the largest natural gas distribution utility in the state, serving about 520,000 residential and commercial customers.