PA Consumer Advocate: Heating With Natural Gas Will Cost Residential Consumers About 20% More This Winter; No Impact On PA Consumers Of PennEast Pipeline Cancellation

On October 4, Interim Acting PA Consumer Advocate Christine Maloni Hoover told the Senate Community Development and Environmental Committees residential consumers heating with natural gas will see a 20 percent increase or so in their heating bills this winter, if current natural gas prices hold.

She noted, "... natural gas pricing has moved up considerably from pandemic-era lows. More recent pricing for September and October has shown continued price increases, moving above $5 per Dth (Dollars per million Btu [from $1.92 last September].  These wholesale market price changes are or will be reflected in utility rates."

"To address price volatility, the OCA has advocated for the incorporation of a laddered approach to purchasing natural gas. Such purchasing is designed to hedge against rapid increases in prices by diversifying the timing of natural gas purchases. 

"As shale gas became a more dominant feature, the use of hedging programs across the natural gas utilities has minimized. In recent weeks, however, natural gas pricing has increased and the OCA will further examine the need to re-institute and/or modify existing hedging programs for the benefit of customers."

No Consumer Impact From PennEast Pipeline Cancellation

The hearing by the Committees was focused on the impacts to the economy and consumers in Pennsylvania of the PennEast natural gas pipeline project cancellation in Pennsylvania and New Jersey.  The company did say it was considering its options for continuing the Pennsylvania portion of the project.

"[The OCA is not aware of any Pennsylvania natural gas utilities entering into contracts with PennEast for natural gas transportation service," said Hoover.  "From a rates perspective, the PennEast project was not anticipated to supply natural gas to a significant portion of Pennsylvania’s residential ratepayers, but rather was designed to move supply further east."

"While the project would have reduced demand constraints for pipeline services and may have lowered costs in eastern Pennsylvania, PennEast likely would have increased out-of-state demand on shale gas supplies," added Hoover.  "The primary beneficiary from a natural gas utility rate perspective under PennEast would have been those areas supplied by the pipeline, i.e., those further east."

"It is further worth noting that the public suspension of the PennEast pipeline has not appeared to negatively impact natural gas pricing," explained Hoover. "On Monday, September 27, 2021, NYMEX Henry Hub futures (looking past this upcoming winter) for January 2023, opened at $4.23per Dth. On Wednesday, September 29, 2021, after PennEast announced the suspension of its project, NYMEX Henry Hub futures for January 2023 settled at $4.13 per Dth. Natural gas futures pricing has remained stable."

Click Here for a copy of Hoover's written statement.  Visit the PA Office of Consumer Advocate website to learn more about this office.

Visit the Senate Community, Economic & Recreational Development Committee webpage for copies of written testimony and a video of the hearing [when available].

Sen. John Yudichak (I-Luzerne) serves as Majority Chair of the Community and Economic Development Committee and can be contacted at 717-787-7105 or send email to: John@pasen.gov.   Sen. Amanda Cappelletti (D-Delaware) serves as Minority Chair and can be contacted at 717-787-5544 or send email to: cappelletti@pasenate.com. 

Sen. Gene Yaw (R-Lycoming) serves as Majority Chair of the Senate Environmental Committee and can be contacted by calling 717-787-3280 or sending email to: gyaw@pasen.gov.   Sen. Carolyn Comitta (D-Chester) serves as Minority Chair and can be contacted by calling 717-787-5709 or sending email to: senatorcomitta@pasenate.com.

NewsClips:

-- AP: Attorney General, Prosecutors Abruptly Halt Natural Gas Pipeline Probe Announcement

-- TribLive: Natural Gas Prices Surge, Meaning Higher Heating Bills Likely Coming For Customers

-- MCall: Brace For Sticker Shock Lehigh Valley: Surging Natural Gas Prices Could Put A Dent In Your Wallet This Winter

-- TribLive: Western PA Oil Companies Not Happy With 80% Increase In Price Of Home Heating Oil

-- WSJ: Winter Is Coming, Will The U.S. Run Out Of Natural Gas This Winter? 

-- PennLive: Get Ready For Cold: Winter Weather Is Supposed To Arrive Early In PA

-- WESA: There Will Be Millions More In Funds To Help Pennsylvanians Who Need Heating Assistance This Winter [Applications Open Oct. 18]

Related Articles This Week:

-- Sen. Comitta: Calls For Hearings On The Failure Of Pennsylvania To Invest In Clean Energy Infrastructure

-- AG Shapiro: Charges Mariner East Pipeline With 48 Counts Of Environmental Crimes In 11 Counties

-- Sen. Comitta: Calls For Halt To Mariner East Pipeline Construction In Light Of Criminal Charges By Attorney General

-- 65+ Groups Ask Biden Administration To Reclassify Oil & Gas Drilling Waste As 'Hazardous' To Prevent Road Dumping Of Wastewater And Other Practices

Related Articles - Natural Gas:

-- House Environmental Committee Fails To Discuss Poor Compliance, Record $55 Million In Penalties Imposed On Natural Gas/Hazardous Liquid Pipelines In Last 5 Years

-- Natural Gas, Hazardous Liquids Pipelines Are NOT Required To Carry Insurance Or Show They Can Pay For Damages If They Explode, Leak Or Kill Someone

-- Pipeline & Hazardous Materials Safety Administration: Told A Federal Court Sunoco Cannot Hide Risk Assessment Data For Its Mariner East 2 Pipeline 

-- DEP: Potential For Environmental Impacts From Spills Or Leaks Of Radioactive Oil & Gas Waste Materials Is Real; Health Dept. Not Aware Of All Chemicals In Oil & Gas Wastewater Making Risk Assessment Difficult

[Posted: October 5, 2021]  PA Environment Digest