Natural gas is a commodity, and its price goes up and down according to supply and demand. There are several factors that influence supply and demand, such as natural gas production and weather, and these factors ultimately set the price of gas.
According to the American Gas Association, the natural gas industry has consistently produced record levels of natural gas since 2018. Average gas production since 2018 has been more than 30 percent higher than average production between 2009 and 2016. For all of 2020, natural gas storage inventories have been above the five-year average.
Citizens Energy Group has leveraged lower natural gas prices through long-term supply contracts that provide discounts compared to market prices. Citizens’ also has Underground Storage facilities in Greene County that include six natural gas storage fields, a compressor station, gas treatment stations, two interstate pipeline connections, and over 200 wells. The fields have a total storage capacity in excess of 7 billion cubic feet of natural gas.
Access to storage facilities allows Citizens to purchase natural gas during the summer months when prices are low and deliver those supplies to meet customer demands during winter months. Using the lower-cost gas from storage minimizes the need for Citizens to purchase higher-priced gas during the winter months.
Lower natural gas prices are good news for both residential and business customers. Assuming normal temperatures, Citizens has projected that the average residential and general heat commercial customer could see a 1.5 percent increase for the November-through-March winter heating season compared to last winter.