Electricity and Natural Gas Prices Decline

Supply prices at lowest levels in years

Electricity and natural gas prices have continued their decline, lowering energy costs for Central Hudson Gas & Electric Corporation’s Mid-Hudson Valley business and residential customers.

“Supply prices for electricity and natural gas, which have generally represented the largest component of utility bills, typically two-thirds, have dropped significantly since the high energy prices of last summer, and are still considerably lower than this period last year,” said Carl E. Meyer, President and Chief Operating Office at Central Hudson. “This has had the positive effect of lowering the total price of electricity and natural gas for our customers.

“Supply prices are not set by utilities but by independent energy markets,” explained Meyer. “Demand for energy, supply, fuel costs and other factors contribute to the supply prices for electricity and natural gas, which are highly variable. Central Hudson does not profit on energy supply, and customers pay actual market prices. These prices have declined substantially over the last several months, and as a result the total prices for electricity and natural gas on utility bills have fallen as well.”

Delivery charges, which are for the maintenance and operation of the electric and gas delivery systems, do not vary with changes in the energy markets, and are regulated by New York State.

Supply charges for electricity are at their lowest level since December 2006, and for natural gas since October 2002. In May, the electric supply charge declined by 50 percent since market prices peaked last August, and 39 percent compared with May 2008. “For customers, the typical residential electric bill of 500 kilowatt-hours per month during May is 17 percent less than the same month last year,” said Meyer.

For natural gas, the results are even more significant. The supply charge declined by 64 percent since last summer, and by 57 percent compared with May 2008. “The average typical residential bill of 80 hundred cubic feet (Ccf) of natural gas this month is 37 percent less than May of last year,” said Meyer. “Clearly, changes in supply charges have a substantial effect on utility bills.”

Meyer noted that while it is impossible to predict future energy prices, the present development is good news. “Lower market prices for energy can easily eclipse other costs, and are the major factor in total electricity and natural gas prices paid by our customers. As for delivery charges, Central Hudson has and will continue do its part to keep operating costs at the lowest level possible while meeting the needs of the communities we serve.”

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