A new natural gas purchasing practice we implemented this year is changing the way we buy natural gas. Already, our customers are feeling the benefit with lower gas costs. We anticipate that over the next year, we will reduce gas costs for our customers by a total of about $100 million.
This is a change from when we used to buy natural gas from the supplier at a competitive price well before the heating season. That strategy worked well to reduce price volatility and minimize costs for our customers when natural gas prices spiked during the winter months. Now, with natural gas prices at their lowest levels in nearly a decade, we will be purchasing natural gas at market prices at the time of delivery.
Tim Sparks, our vice president of energy supply operations, points out that the discovery of large domestic sources of shale gas has had a major impact on driving down prices. “There’s no doubt shale gas is the big game changer in the natural gas world,” Sparks said “We’re continuing to adjust our gas purchasing strategy to ensure we’re minimizing our costs so we can maximize the benefits to our customers.”
Since January of this year, Consumers Energy has already reduced the per cubic foot (ccf) cost of natural gas to its customers by about 11 percent. When coupled with the energy efficiency program we offer, customers can realize even more savings on their gas bill.