Considering the recent decline in natural gas prices during the fall of 2008, why hasn my natural gas bill also decreased?
While the price of natural gas on the spot market has dropped considerably in the last two years, both of the natural gas utilities regulated by the Delaware Public Service Commission, Delmarva Power & Light Company and the Delaware Division of Chesapeake Utilities Corporation, purchase natural gas for their customers through a portfolio approach. Some of the gas purchased is at the current spot market price, but the companies also rely on storage injections and a hedging program to fill out the gas supply portfolio. Most natural gas companies draw down on the natural gas in storage each winter for peak day needs, and consequently they buy gas during the spring and summer months to replenish the storage. The price of gas in storage reflects the prices paid in previous months, not the current market rate. When that gas is withdrawn from storage for use this winter season, it is one element of the higher gas cost rates being passed on to consumers now. Both Delmarva’s Gas Cost Rate and C
