February Cold Weather Gas Costs and Proposed Bill Impacts
To our customers,
Cold weather throughout the region in February 2021 created market conditions that forced New Mexico Gas Company to pay substantially higher than normal prices for the natural gas we delivered to our customers.
To put this in perspective, during the week of February 13 to 18, 2021, the price of natural gas charged to NMGC -- and other utilities in this region -- rose from approximately $3 per MMbtu to anywhere from $100 to more than $200 per MMbtu. These extraordinary market conditions and prices were unprecedented. We paid as much for natural gas during this one week in February as we paid for gas in all of 2020. These conditions also affected most other utilities throughout the region who purchase natural gas for their customers.
By rule, NMGC passes the cost of gas on to its customers without markup. Because we pass the cost of gas directly to you, our customer, we want to take this opportunity to keep you informed about how the February cold temperatures and extraordinary high costs for gas will impact your bills.
Normally, we would have already begun to pass on these gas costs in your March or April 2021 bill. Instead, on April 19, 2021, in an effort to minimize the effect of these extraordinary prices on our customers, we filed an application with the New Mexico Public Regulation Commission seeking recovery of the gas costs over a longer period of time. Through this effort, we are seeking reduce short-term bill impacts on you. As filed, our proposed plan is as follows:
- First, we are seeking to minimize the impact to your monthly bill by spreading the recovery of these costs through the end of December 2023, a longer period than would normally be sought for recovery of gas costs.
- Second, we are proposing to even out the impact to your monthly bill by seasonally adjusting the rates. The proposal would result in an increase to the average customers’ bills in the average range of $2.37 to $8.84 per month. The average increase over the year would be approximately $5.70 per month.
If our plan is approved by the New Mexico Public Regulation Commission, you should see these gas charges on your bill starting later this summer and continuing through the end of 2023.
Even with our best efforts to minimize this impact, we recognize that this could have a significant impact on you, so we are taking additional steps to help alleviate the impact from these costs as well as the impacts that the Coronavirus pandemic has had on us all. We stand ready to help our customers handle their bills. We are committed to working with customers who need assistance to establish payment plans to help them catch up on their bills.
Also, to further help customers, our payment centers are re-opening on May 3 to take payments and to personally assist our customers.
Earlier this year, we established a $1.2 million fund to assist income-qualifying residential customers and small business owners who have fallen behind on their natural gas bills because of the Coronavirus pandemic.
- Residential customers can apply for help through New Mexico Gas Company’s HEAT New Mexico program. Qualified residential customers will receive a one-time payment of $150 toward their New Mexico Gas Company bill and can enter into payments arrangements if necessary for any remaining balance.
- Small business owners can apply online. Those who qualify will be eligible for a one-time credit of up to $250.
Again, if you have any questions please call us at 1-888-664-2726.