The price for natural gas has dropped about 60% on commodity markets since late fall, in sharp contrast to the increase that was expected. Iowa’s largest utility contracted ahead to assure its supply. MidAmerican Energy spokesman Mark Reinders says some of those falling costs will be passed along.
Reinders says it looked like natural gas prices were going to be significantly higher going into winter but as late fall has progressed and now we’re into winter, those prices have fallen. He says the savings will be turned over to the customers as the months progress. Reinders says MidAmerican wanted to make sure it had enough of a supply to get through the winter, and they were on the wrong side of the price change.
"It’s kind of a Catch 22," Reinders says. "Obviously, if you make a plan ahead of time and lock in some natural gas prices and put it in ground storage as we have done, we get about 70% of our overall winter needs for our customers locked in prior to October 1st. That part is still going to impact customers in terms of a higher rate than is out there right now." Reinders says natural gas customers may not see much of a bonus from this year’s lower prices.
He says they’re predicting costs to be about the same for this winter compared to the winter from a year ago. That’s good news for the customers, he says, in that prices won’t be rocketing still higher, as had been predicted. Des Moines-based MidAmerican has more than 700,000 natural gas customers in Iowa, Illinois and South Dakota.