The falling price of natural gas may be tough on energy companies, but it’s providing a source of cheaper energy for customers of Fort Smith-based Arkansas Oklahoma Gas Corp.
Also, SourceGas customers in Northwest Arkansas will see lower cost-of-gas rates for their Spring and Summer bills.
On Wednesday (April 4), AOG reported that it has filed with the Arkansas Public Service Commission and the Oklahoma Corporation Commission to lower its “summer season cost of gas.” The Arkansas decrease is about 31% per CCF, and the Oklahoma reduction is about 28%.
The reduced gas costs will appear on bills for Arkansas and Oklahoma customers between April 1, 2012, and Oct. 31, 2012.
“Natural gas utilities in Arkansas recover only the actual gas costs directly from customers, with no mark-up on or to the purchase price of the natural gas. Nationally, gas prices have been declining, which has enabled AOG to reduce its summer season cost of gas significantly below last year’s level,” AOG President Michael Callan said in a statement.
Oklahoma also restricts utilities to charge only for the cost of gas, noted the AOG info.
On Friday, natural gas futures fell to a 10-year low, plunging 10 cents, or 4.7% to 2.17 per 1,000 cubic feet (mcf) in trading on the New York Mercantile Exchange.
Valerie Wood, an energy consultant and president of Energy Solutions Inc., predicted in February that natural gas prices would fall to a 10-year low this year.
“Over the past year, the active natural gas drilling rig count in the U.S. has fallen by 20 percent, while the active crude oil drilling rig count has risen by 60 percent,” Wood said in her 2012 natural gas outlook. (Link here for a recent story about the impact on Arkansas of falling natural gas prices.)
SourceGas filed its lower rate request with the PSC on March 30. PSC approval will result in an about 30% decline in what consumers pay for the gas cost portion of their bill.
CenterPoint Energy, which also serves parts of the Fort Smith metro area, has also lowered its gas costs. In Arkansas the gas cost should drop by about 30% on consumer bills, with the Oklahoma decline closer to 20%.
“The price we pay to purchase natural gas has continued to drop in the last several months,” Bruce Coogler, vice president of Gas Supply for CenterPoint Energy, said in a statement. “We are happy to be passing along savings to our customers; lower gas prices coupled with warmer than normal weather means lower gas bills for our customers.”
CNG PRICE DECREASE
AOG has also dropped its Compressed Natural Gas price from $1.53 per gasoline gallon equivalent (GGE) to $1.34 per GGE as a result of lower natural gas prices.
AOG in early 2011 opened a public CNG fueling station located in the AOG operations center (5030 S. S St.). At the time it was the first public CNG fueling station in Arkansas. The public station is open open 24 hours, 7 days a week and is self-serve with a credit/debit card reader.
CNG conversion costs vary for different makes and models, with the range being between $6,000 and $18,000. The average kit cost on a Chevrolet light duty truck is about $10,700.