Written December 20, 2013
Rhode Island residential electricity prices to see 12.1% increase in energy component of their bil
As we have seen the price (@ Henry Hub) of natural gas has increased by over 200% from the incredibly low in April of 2012 of $1.95 per decatherm, and we must remind ourselves that it was only 5 years ago that Natural Gas was well over $10 a decatherm. The producers of Shale Natural Gas have alluded that profits at the well head can only be seen when prices are north of $6 / decatherm. New LNG Plants are in the works, a recovering economy, and expansion of end users will also influence the price of Natural Gas upwards. New England’s Natural Gas, due to infrastructure constraints , constantly float at a very significant premium from Henry Hub with large spikes in the winter.
So you ask yourself ”Ok, Paul, thanks for bringing us down at the close of this year, where are you going with this, it’s friday and clearly you have no Holiday parties to go to.”
Sorry, so let me pull this together before you dive head first into in the Company’s eggnog punch bowl with a NASA issued snorkel.
In New England approximately 60% of our electricity bill is for energy, the other half is mainly distribution and transmission. Of that 60% that is energy, 40% is produced from Natural Gas of which very little is ‘firm” . With that said we have high exposure to electricity prices and we can potentially see significant increases in electricity prices over the next 5 years, if all stay the same.So what is the solution, easy, what is needed……….hey very large receptacle of Eggnog has just landed on my desk…….. have a good holiday …I will get back to you on this……………Happy Holidays and have a Great New Year!!!
