Natural Gas Prices Could Drop Nearly 10 Percent For National Grid's Rhode Island Customers

Lower gas costs paying off for natural gas users

PROVIDENCE, R.I. – As temperatures remain warm, it’s difficult to consider that very soon, natural gas customers in Rhode Island will be using more natural gas than they are now in order to heat their homes and businesses. The price they pay for that gas, however, will be significantly lower if the Rhode Island Public Utilities Commission approves the proposed natural gas supply prices recently submitted by National Grid.

A typical residential customer who heats with natural gas can expect a 9.6 percent reduction in their bill beginning November 1, 2015. That means an annual savings of just over $120.00 for a customer using 846 therms. When coupled with a natural gas price reduction that went into effect on November 1, 2014, National Grid’s Rhode Island customers will be paying approximately 14 percent less than what they paid through most of 2014. National Grid purchases natural gas for its customers and passes through those costs.

“We know the winter season can pose an extra challenge when it comes to energy costs so we’re very happy to be able to pass on the savings created with the availability of lower cost natural gas,” said Timothy F. Horan, president of National Grid in Rhode Island. “Domestic natural gas is essential to providing the mix of energy sources that is essential to our region’s future growth and prosperity.”

Two factors are contributing to the lower prices. The first is an anticipated drop in the cost of natural gas. The second factor is a reduction in the surcharge used to reconcile the difference between the cost of gas we purchased in the prior year versus what customers were billed.

Pipeline Constraints Continue

While less expensive natural gas is helping to bring down costs for residential and commercial customers, New England needs additional gas pipeline capacity so that gas can continue to be delivered safely and reliably, especially as customer demand increases.

As demand increases and with about half of New England’s power plants fueled by natural gas, electricity supply prices remain volatile. The region’s pipeline constraints limit the amount of natural gas available for electricity generation, which can lead to price spikes during the coldest days of the year. Those spikes, in turn, affect what customers pay for electricity.

At the same time, there is a need for cleaner and more reliable energy. National Grid believes the best long-term option for New England is a balanced portfolio of renewable energy, increased energy efficiency and additional gas pipeline capacity.

National Grid supports projects that diversify Rhode Island’s energy portfolio to include more forms of renewable energy. These include the Deepwater Wind project and the Renewable Energy Growth Program which is designed to add 160 megawatts of distributed generation electricity to the existing 40 megawatts by 2019.

As always, the company encourages energy efficiency. National Grid provides a number of energy efficiency programs here. For tips on saving energy visit the Energy Savings Tips page on our web site. National Grid also offers options such as balanced billing to help customers manage their energy costs, because while gas prices may be low, usage will be up during the winter which can lead to high seasonal energy bills. For more information on these programs go here.