County: Natural Gas Prices Could Be High This Winter


Officials with the Los Alamos Department of Public Utilities (DPU) advise its natural gas customers that prices may be high this winter. The U.S. Energy Information Administration reports that the Henry Hub natural gas spot price traded at over $5 per dekatherm in September and appears to be on an upward trend.  Historically, the price at this time of year has hovered around $2 to $3 per dekatherm. 

There are several factors that can affect supply and demand of natural gas which result in price fluctuations. These include extreme weather and climate. Another trend is electric generation using natural gas, as coal-fired electric generation plants close and droughts in the west impact hydroelectric plants.

While DPU cannot control these external variables, it alleviates some of the variability of the gas market by pre-purchasing natural gas based on 80 percent of its historical load.  Moreover, through a Joint Powers Agreement with the New Mexico Municipal Energy Acquisition Authority (NMMEAA), the department locks in a discount on the San Juan closing index price each month.  Additional gas purchases are transacted on the spot market daily pricing. 

The National Oceanic and Atmospheric Administration (NOAA) is predicting a La Nina winter season, which tends to mean that New Mexico will be dryer and warmer than normal, it also means that the Northwest portion of the U.S. could be colder and wetter.  As Los Alamos experienced last February, neighboring states can directly impact the price of natural gas here in New Mexico, as was demonstrated after Texas was hit with a severe winter storm that increased demand while the supply decreased. 

The cost of gas for DPU’s residential and commercial customers in October is currently $0.55 per therm. Once the $0.23 is added for fixed transportation expenses, customers will see a charge of $0.78 per therm on their utility bills.  For comparison, customers paid $0.43 per therm in October 2020 ($0.20 for the cost of gas and $0.23 for the fixed costs).

Department officials indicate that customers can prepare now by implementing several measures to reduce their use of natural gas. 

  • Wash clothes in colder water.
  • Use lower thermostat settings and night setbacks.
  • Install a “smart” or programmable thermostat to reduce energy use while inhabitants are sleeping or away.
  • Install indoor or outdoor shrink film window insulation.
  • Install door weather strips and seals.
  • Set water heater temperatures to 120 degrees Fahrenheit.
  • Close the flue damper on fireplaces.
  • Add insulation to attics, and
  • Close off heating to unused rooms.

Customers can also visit the U.S. Department of Energy’s Energy Savings brochure for more conservation ideas and tips.