Local natural gas price predicted to stay low [The Blade, Toledo, Ohio]

Nov. 30--THE WEATHERMAN -- should you choose to believe him -- is calling for a cold, wet winter. Even if that proves true, consumers can at least take some solace that heating costs should remain relatively steady throughout the season.

The amount of natural gas in storage going into December has never been higher, and producers are consistently setting monthly production records.

"When you have those two things going on simultaneously, obviously that pushes prices down in most any set of circumstances in every marketplace and natural gas is a commodity, so it's no different," said Mark Frye, president of Palmer Energy and consultant for the Northwest Ohio Aggregation Coalition.

It would take a very extended period of cold weather to have any significant effect on natural gas prices, he said.

Columbia Gas of Ohio, the major utility serving northwest Ohio, will charge 52 cents per 100 cubic feet of natural gas in December, down 2 cents from November and down 9 cents over last December -- almost a 15 percent drop. The rate has been lower in December only twice in the past decade -- 48 cents per 100 cubic feet in 2009 and 2001. The highest price seen in that time was a eye-popping $1.28 in 2005 in the aftermath of Hurricane Katrina.

Chris Kozak, a spokesman for Columbia, said it's difficult to predict prices, but the current price, storage capacity, and production are a "pretty good indication prices are going to remain low as we go forward and it gets colder out."

Though the energy market has rocked with volatility in recent years, the natural gas coming out of the Marcellus shale formation has been a game-changer. So much so, said Robert Stitt Black, president of Waterville Gas & Oil Co., that customers shouldn't be worried they need to lock in prices in a long-term contract.

"You're just buying an insurance policy that you don't need," Mr. Black said. "Given the stable supplies ... I don't see any risk going out prices are going to jump up. If and when they do, you will have saved so much by not locking into those over the next several years, you don't have to worry about it."

Waterville Gas, which serves a relatively small customer base, has a December price of 42 cents, down 25 percent from last year's 56 cents. The family-owned company has about 6,000 customers in Waterville and portions of Middleton, Monclova, Perrysburg, and Waterville townships.

Most fixed-rate contracts offered by independent suppliers in the Toledo area to Columbia Gas customers are 65 to 73 cents per 100 cubic feet, although some offer contracts lasting only through the cold months that are closer to Columbia's rate.

Ohio Natural Gas, for example, has a five-month rate of 60 cents. The company is also offering a discounted variable-rate plan for new customers for per 100 cubic feet. Other companies have variable prices ranging from 53 cents to 70 cents, according to a comparison chart compiled by the Public Utilities Commission of Ohio.

Even though prices are off from last year, being thrifty still means taking steps to winterize and keep indoor temperatures reasonable.

"Consumption is really the silver bullet," Mr. Kozak said.

Contact Tyrel Linkhorn at: tlinkhorn@theblade.com or 419-724-6134.

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