NATURAL GAS CONNECTION IS INDEED IMPORTANT

We have highlighted earlier that the cost of natural gas on the open market influences the price of electricity in the states where that fuel is largely used to generate the power.  That is certainly true here in Texas.  It behooves us all to be aware of current and future prices of natural gas when deciding to switch electricity retail providers and for what term of contract to lock into.  Informed decisions are usually better.

Following is extract of Market Summary published in the Houston Chronicle Friday, December 24, 2010:

Energy Price, Natural Gas-Henry Hub,  U.S. Dollars per MMBtu
     Last Price-4.08
     Pvs Day-3.99

Constant Maturity Index (Composite percentage change of all futures traded, providing an insight into what direction prices are heading)
     Per Cent Change-Day  -0.7
     Per Cent Change-Month   -4.3
     Per Cent Change-Year To Date   -36.7

Commodity Price Outlook (The median price of analysts surveyed by Bloomberg)
     2011 Forecast   5.00
     2012 Forecast   5.41
     2013 Forecast   5.75

NATURAL GAS SPOT REPORT

Electricity rates in Texas are greatly affected by the price of natural gas on the commodities market. In 2009, 42 per cent of the state’s electricity was produced with natural gas, with an even higher percentage during periods when electricity demand is high.

Natural gas prices peaked at above $13 per MMBtu during mid-2008. Prices averaged $4.54 per MMBtu in the first nine months of 2010 per the PUCT.

Spot prices at the Henry Hub, as reported at the New York Mercantile Exchange (NYMEX), decreased $0.24 to $4.22 per million Btu (MMBtu) during the week ending Wednesday, December 15, 2010.