BGE nat gas price lowest since 2007
The default BGE natural gas price has dropped again, falling to 84.6 cents per therm for the month of March. That's the lowest since it was 87 cents in late 2006 84.12 cents in October 2007. Note I said the default BGE price -- the one that everybody pays unless they sign a fixed-price contract with BGE Home, Washington Gas Energy Services or others. Those folks are paying much more and ought to consider dumping those deals -- even if it involves paying a termination fee -- and going back to the standard, floating, monthly BGE rate.
Last fall BGE Home signed thousands of households up for a fixed-price, year-long deal of $1.599 per therm -- nearly twice what BGE's floating price is now. Some of the sticker shock over this year's BGE bills is surely from folks who locked into these terrible fixed-price deals. I keep hearing from readers who don't understand that their fixed-price contract is with BGE Home, not BGE, and that they have an option to go with the regular, floating rate. The recession is causing energy prices to plunge. Natural gas futures for next winter are below 70 cents per therm. Unless somebody can lock you up at THAT price for a year or two, I see little reason to not to go with BGE's floating rate.
Comments
I made the mistake of signing up last year for the program and I just today got a letter from BGE Home to renew for next year at a rate of .99 cents per therm for 13 months. I am not signing up for it this year.
Posted by: Dean | March 3, 2009 7:32 PM
Has anybody mentioned the fact that the BGE rate per kilowatt hour is still around 15 cents (up from 4 cents pre-Constellation) even though energy prices are less than half of their peak levels?
Posted by: Mike Massarelli | March 4, 2009 8:08 AM
Mike: BGE bought their electricity back when prices were high. Prices should come down somewhat -- ~10% -- in the next year. See more in this column: http://www.baltimoresun.com/business/bal-bz.hancock31jan31,0,3411333.column
Jay
Posted by: Jay | March 4, 2009 11:00 AM
I'm on a flexible price contract with WGES paying 79 cents/therm. I'm also getting electricity for 2% off BGE through May.
WGES is an OK deal with me.
Posted by: MikeA | March 4, 2009 6:22 PM
Jay,
I've been reading that the E&P companies are shutting down wells and suspending new drilling due to the low gas price. Some producers are saying that gas prices should move higher in Q3 as supply adjusts to the lower demand. If you believe that prices have bottomed and are on the rise, is now the time to lock-in the fixed rate contracts?
Posted by: Charles | March 4, 2009 7:11 PM
I just saw an ad on A page of the Baltimore Sun for WGES, you can sign up for a year contract for 10.8 cents.
Posted by: Peter | March 4, 2009 7:47 PM
Charles -- If you think gas prices will rise for next winter it would be smart to lock in. I'm betting they won't. The wells that are shutting down are fairly high-cost ones that don't make sense to pump with low prices. I can't believe the economy will be strong enough this year to put much upward pressure on prices. In any event Henry Hub (Louisiana) gas for January delivery is selling for 60 cents a therm. Add a dime to pipe it to Maryland and it's still only 70 cents.
Posted by: Jay | March 4, 2009 10:00 PM