A: January was one of the coldest periods on record. Colder weather increases gas usage, and supply disruptions caused higher natural‑gas prices nationwide.
January’s nationwide cold spell was notable for its severity, longevity, and geographic scope.
We experienced record-breaking temperatures and dangerous wind chills that triggered a series of issues and variables impacting natural gas supply, demand, and costs. The natural gas industry faced massive “freeze-offs” - when water and liquids in the gas stream freeze and shut down production.
At the peak of the storm in late January, roughly 15% of the total U.S. natural gas production was shut down due to freeze-offs.
The extreme cold caused residential and commercial gas consumption to surge, averaging 29% higher than the five-year average during the peak of the storm.
The combination of low supply and high demand resulted in record-breaking price spikes.
A: The main drivers are higher usage and temporary recovery of extraordinary supply costs caused by extreme weather—not a permanent base‑rate increase. The combination of low supply and high demand resulted in record-breaking price spikes.
Your natural gas bill is comprised of three components:
1) the transportation of natural gas along the interstate pipelines – a federally-regulated and fixed price;
2) the local distribution of the gas to your home via your provider – a set administrative price to deliver the gas to your home, also a fixed price, and
3) the cost of the natural gas molecules you use in your home for heating, cooking, water heating and possibly more – this cost is variable and fluctuates based on market conditions or supply and demand; the recent events - extreme temperatures across the country and in your service territory, production shutdowns due to frozen equipment, and increased usage by customers heating demands - have resulted in volatile and historic high prices.
A: Reducing thermostat settings, sealing drafts, and spreading payments where available can help.