Lower Natural Gas Tariffs Also Mean Cheaper Electricity

2011-6-2

It will be a bit cheaper to heat your home this winter if you rely on natural gas to keep it comfortable, and starting yesterday the cost of supplying electricity to your household will drop, too.

In filings with the state Board of Public Utilities (BPU), the four gas utilities yesterday proposed tariffs that would lower bills for residential ratepayers anywhere from 1 percent to 9 percent. Electric bills also would fall the same day the tariffs go into effect, primarily because of lower prices for natural gas, which is used to generate a good portion of the electricity employed to keep the lights on.

Electric bills would drop by 3 percent to 4 percent depending on the utility, but those decreases are likely to be more than offset by other increases in delivering power to customers later this summer, when heat waves drive up the cost of electricity.

Still, the filings continue a welcome trend of falling natural gas prices, a development that is due to strong domestic production, according to Katie Teller, an economist with the Energy Information Administration (EIA), an arm of the U.S. Department of Energy (DOE). The decreases are in line with the short-term outlook of the agency, which projects natural gas prices could be approximately 15 cents cheaper than last winter.

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