COSE Update - September 2008 - (Page P3)

coaster cost of natural gas. ound bites are everywhere. Are gas prices up or down today? Sure we’re feeling the pain at the pump (and in the market), but wait until this roller coaster hits your first heating bill hill of the year—that’s if you decide to turn your heat on at all! So we caught up with Darrell Bragg, vice president at RD Energy affiliated with COSE’s natural gas partner, Integrys Energy, to get the inside scoop on natural gas prices and where they’re headed. gas gasps!find out what’s really behind the roller s It’s also a fact that natural gas storage levels are running behind last year’s levels and chances are very good that heading into this winter, storage levels will be 6 percent to 10 percent below last year. During the summer, the fear of tropical storms and hurricanes coming into the Gulf of Mexico and disrupting supply in an already price volatile market only increases that volatility. And the term “speculators” is also being widely used as a reason for the large price increase. While speculators are a necessary element to have a liquid trading market for the various commodities including energy, and more specifically natural gas, often speculators who come in many shapes and sizes can cause normal or expected price volatility to expand to higher or lower price extremes. come down to approximately $3/mcf. While this is somewhat of a relief, natural gas prices are still up approximately 30 percent over last year. Predicting the future is always difficult. Absent of storms in the Gulf and excessive heat in the high population areas of the country, along with moderating energy prices and favorable natural gas storage levels, natural gas prices could continue to trend downward over the next six months, especially if the start of the winter heating season is delayed due to a warm November and December. This is all a best case scenario and could very well happen. But the fear of what we don’t know along with the possibility of unexpected variable causes in the supply and demand relationship make prediction almost impossible. Q: Why are natural gas prices so high? A: In the U.S., natural gas production and demand are very close to being balanced with production, even slightly exceeding usage on an annual basis. It doesn’t take much of a change in either demand or production to see volatility in prices on a monthly basis. Over the past few months, we’ve seen oil prices rise to record levels. Although natural gas doesn’t rise and fall completely in tune with oil, there definitely is a relationship. Right or wrong, oil and natural gas prices have caused great alarm for gas businesses and residential customers. Q: When do you think we’ll see relief? What can we expect in the coming months? A: The good news is that prices are already coming off the record price levels. Between January and July 2008, natural gas hub prices climbed $6/mcf at the pricing hub. In July, hub prices have Q: What are some ways business owners and consumers can cut costs? A: Of course the easiest ways to cut costs is to cut how much is used. But with prices so high, even if the usage is cut, your total expenditure may not go down. Besides cutting back on the thermostat or production, energy efficiency or making better use of the energy consumed is a good start. But maybe a better question is, “How can business owners and consumers manage their energy costs.” For business or residential consumers eligible for utility choice programs, the COSE Natural Gas Program from Integrys Energy is a smart choice. It provides discounted natural gas prices along with unique pricing plans that should meet any consumer’s budget or risk requirement. And enrollment is easy. i cose.org/naturalgas or (216) 592-2222 plugged in • COSE Update • 3 http://cose.org/products/businessoperations/naturalgas.asp

Table of Contents Feed for the Digital Edition of COSE Update - September 2008

COSE Update - September 2008 Contents Memo Upfront Vision Tech Business Interrupted The “Bigness” of Small Business What’s the Plan? People Telecom Advocacy Communications Health Pipeline Connect Arts My Cause Plugged In

COSE Update - September 2008

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