THE TRUTH ABOUT FIXED MONTHLY BILLING

By now you’ve probably seen a lot of promotions from some of the Choice Gas suppliers offering some form of fixed monthly bill. They might say something like this: “Based on your estimated usage of 1000 therms last year, we’d like to offer you an all-in fixed monthly bill of only $65 for the coming year.”

But is it a good deal?

The allure of a fixed monthly bill is obvious. You may be a retiree on a fixed income, or a student in your junior year at University of Wyoming barely surviving on a steady diet of Ramen noodles, or maybe you’re just the kind of person who wants to be able to plan your monthly expenses well into the foreseeable future. A fixed monthly bill would definitely make budgeting easier- but at what cost?

Let’s take the example above. If your monthly bill is $65, you will pay a total of $780 over the course of an entire year (12 x $65). Now we’ll divide this total by your total annual usage of 1000 therms to get an average price of 78 cents per therm.

What?? I paid 78 cents per therm last year when I remember being offered a fixed price of 39 cents per therm from last during last April’s selection period?

Fun fact: WPCA offered a fixed price of 39 cents per therm for the Casper division last April.

When a Choice Gas supplier offers you a fixed price, they will almost invariably pad their price with lots of extra profit margin to cover themselves in case you decide to leave all the windows in your house open during the winter months, effectively heating the atmosphere of eastern Wyoming. In this situation, you’ll pay the same fixed monthly bill while the energy they send to your home literally goes out the window.

Is there any other way to balance my bill throughout the year without paying extra?

We’re glad you asked. Black Hills Energy (formerly Source Gas) has a special program available to the public appropriately called Balanced Billing. The utility will calculate your monthly bill based on a 360-day rolling average of your usage at current and historical costs, and you can plan on your bill staying very close to that average from one month to the next with minimal fluctuation.

How do I get started?

First thing’s first: find the best per-therm price you can find, whether fixed, index or blended. Next, call Black Hills Energy at 1-800-563-0012 and ask them about Balanced Billing, or get more details from their website by clicking here.

Between WPCA and Black Hills Energy’s Balanced Billing program, you can accomplish the same goal as other fixed monthly billing options but without the extra cost.

The next time you see one of those promotions, don’t fall for it – call up WPCA instead.

Wyoming Producer-Consumer Alliance

A Wyoming resource for Wyoming residents

State of the Market

We are swimming in natural gas. Stockpile levels in storage facilities across the continent are at levels far higher than normal coming out of the winter season, all while domestic production still hovers near record highs despite active rig numbers falling out of the sky. Pair this with an abnormally warm and mild winter, and we are left with a supply/demand overhang that has pushed natural gas futures prices into record low territory. During last year’s selection period many suppliers – including ourselves – were confident that the market had bottomed out, and then it continued to fall.

CIG – ROCKIES

In central and eastern Wyoming, the primary price index for natural gas is called the Colorado Interstate Gas, or “CIG”, Index. This price index is driven by trade activity and expectations surrounding production and weather trends, and it will fluctuate from one month to another. Here’s a graph of the CIG Index over the last two years in blue, followed by currently traded prices over the next Choice Gas selection period of June 2016 to May 2017, shown here in orange:

CIG Index

You can see that prices have been falling pretty steadily, but that they are looking to begin drifting upward again for the coming selection year, with an average of about $2.25 per dekatherm, or $0.225 per therm as we see at a consumer level.

In the near future, we’ll take a look at all the new pricing options you’ll be seeing this year next time. Until then, we’ll keep on moving Wyoming resources to Wyoming customers.

BLACK HILLS AND TALLGRASS INTERSTATE GAS TRANSMISSION CHANGES

Some other things you’ll notice this year are a change to the name of the utility. Source Gas has been acquired by a much larger utility company called Black Hills Energy, headquartered in Rapid City, South Dakota. So far, the name is the only thing that has been changed, but there may be more changes to come. The Choice Gas program is expected to continue as-is for the foreseeable future.

Additionally, one of the large interstate gas transmission pipelines known as Tallgrass or TIGT is currently working through a rate case to increase transportation charges. This increase in transmission may or may not affect the cost of natural gas in Wyoming, and therefore to you at your home or business. While this increase in costs is yet to be established, WPCA has taken care to create new pricing options that can include a minor increase if necessary so as to ensure that these new costs can be fairly shared between us and our customers while still ensuring quality service and a reliable supply.

NOW WHAT?

The big question on everyone’s mind is which pricing option is best and which supplier has the best offer. WPCA has been a Choice Gas supplier since the early years of the program, and we have always been extremely competitive on price. It’s our policy to keep things simple and to give real time to any customer who calls- no concern is too trivial. Our policy hasn’t changed, and if you have any questions about the coming selection period, give us a call! We’d love to chat.