Madison gas prices

There are two main components in natural gas bills:

Distribution – A charge for delivering natural gas to a home or business. The charge:

Covers distribution system costs such as local pipes, meters and customer service expenses. Does not change monthly but is adjusted periodically after review by state regulators.

Supply or commodity - The cost of natural gas that MGE buys for its customers is passed through to customers as a separate charge on the bill. It changes monthly depending on the:

Current market price of natural gas. Price of gas in storage. Financial hedging that mitigates volatile price changes.

Traded as a commodity

Natural gas is one of many commodities traded on the New York Mercantile Exchange (NYMEX). Gas prices can fluctuate due to:

Changes in gas supplies, including production and storage. In addition to traditional domestic supplies of gas, the supply is affected by:
Fluctuations in natural gas supplies from Canada. New sources of supply, such as shale gas extracted from new fields of exploration in Pennsylvania, North Dakota and the Texas Panhandle.

Global tensions. High cost of competing fuels such as oil and propane. Weather, such as extreme cold weather or hurricanes that may damage gas facilities. Fluctuations in demand for natural gas both domestically and in oversea markets. Increasing reliance on natural gas to replace coal in manufacturing electricity.

At MGE, we:

Aggressively pursue the best natural gas market prices available for customers. Begin to buy gas supplies in the summer and put this gas into storage to:
Ensure adequate supplies for winter. Act as a hedge against possible higher winter prices.

Employ a financial risk management program to reduce price swings for customers caused by volatile gas prices.

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