Volatility in the natural gas market has led to spikes in supply charges for National Grid and PSEG customers this month, and one official is predicting prices could remain high through the balance of the year.
National Grid, the region’s natural gas supplier, posted August customer supply charges that are the highest in the five years the company has been providing the figure, with the year over year price for August jumping 133%.
"High natural gas prices will continue to impact everyone this upcoming winter both nationally and globally," National Grid spokeswoman Wendy Frigeria said in a statement to Newsday.
For typical National Grid residential customers this month, the supply cost jumped to $1.073 per unit of gas, known as a therm, compared with just over 85 cents per therm in July. August is typically a time for lower rates and lower usage. Last August the price per therm was 45.9 cents.
Electric customers who typically use most of their energy in the summer are likely to see a bigger impact from the jump. Most Long Island power plants are fueled by natural gas.
For August, PSEG Long Island, which manages the grid for LIPA, reported the power supply charge on customer bills jumped 7.6% to 13.86 cents a kilowatt hour compared with July, an 24% increase from a year ago.
In comparison, the power supply charge in July was 12.88 cents, and 11.15 cents for August a year ago. PSEG in a statement said this August's charge is "as high as it has been in the past five years," and cited rising natural gas prices.
The higher rate comes as an exceptionally hot week is expected to push usage to higher levels as customers crank up their air conditioners. Long Island on Tuesday hit a peak of 4,747 megawatts during the afternoon, and the figure is expected to rise Thursday, according to the New York State Independent System Operator, which manages state energy markets.
PSEG recommended customers reduce usage to cope with rising bills, including avoid setting thermostats higher when no one is home, sealing homes to keep in cool air in, and setting refrigerators to the "most efficient temperatures."
LIPA last month said continued volatility in natural gas markets could keep prices relatively high through the remainder of the year. The price impacts are evident in electric rates even though the utility’s hedging positions for fuel — essentially insurance policies to tamp down volatility — is expected to result in savings of more than $300 million for the year.
LIPA chief executive Tom Falcone, in a trustee briefing last week, noted the wholesale price for natural gas has increased fourfold in just two years, with much of the spike in the past six months. He said prices through the rest of the year are projected to continue high, but could begin a slow decline starting next year.
"It's very volatile," Falcone said, noting prices are spiking not just because of the war in Ukraine but also because of the weather.
"We've had very hot weather, and that will also affect prices this winter," he said, "because this is the time when you usually are adding to storage of natural gas and then pulling down that storage in the winter."
LIPA has access to a fuel prepay program that can save it 10%, he said, and the recent return of the Neptune cable will provide access to potentially cheaper energy through the summer.
National Grid spokeswoman Wendy Frigeria noted National Grid’s price for gas is the same as customers, meaning there’s no markup for profit, and said the company has a hedging program to limit price spikes.
National Grid has programs to help customers at https://www.nationalgridus.com/Upstate-NY-Home/Bill-Help/Help-Making-Payments
It's not just natural gas prices that are high. Home heating oil has also remained high during the summer, after spiking in the late spring. The average price for home heating oil across Long Island for the week ending July 25 was $5.39 a gallon, a 64% jump from a year ago, but below the recent high of $6.46 in mid-May.
Statewide on July 25, the average price was $5.24, according to New York State Energy Research and Development Authority data.