A Word About Natural Gas Prices

As you look at your bill compared to last year, you will notice an increase in the gas-cost portion. We want to explain why this part of your bill has gone up and offer some options available to help you.

First, the price of natural gas is up generally around the world, driven by supply-and-demand market factors. In fact, the cost of gas portion of residential customer bills was more than four times higher in January 2023 compared with January 2020.

New Mexico Gas Company is not a natural gas exploration and production business. We purchase natural gas in the open market. It's important to know that, by rule, New Mexico Gas Company passes the cost of gas to our customers without markup. We don't make any profit on the gas we purchase for you. You pay what we pay.

To help protect customers from price spikes, we utilize a hedging program where we contract during the spring and summer months for a cap on the next winter's prices for some of our gas supply. It's like an insurance policy: some years we don't use the hedges, but in years where prices move much higher than the market norm, we pay less on behalf of our customers than the market price. In January 2023, for example, the price of natural gas under our hedges was three times lower than market prices, which saved our customers about $90 million in overall gas costs for that one month. The cost of gas portion of customers' bills was still much higher in January 2023 than in prior years but it could have been even higher if we hadn't had our hedging program.

The chart below shows the major components of a residential customer bill in January for each of the last four years. NMGC customers use, on average, 118 therms of natural gas in January so the chart reflects the costs associated with that consumption. Many factors impact each customer's consumption including the age and size of their home and the appliances they use. While the chart is not indicative of every customer, it does provide important insight into what is driving the increases in bills over the past four years -- mainly the cost of natural gas.

Month
and Year		 NMGC Monthly Access Fee NMGC Distribution
Transmission Charges
@118 therms		 Cost of Gas @118 therms Government Taxes & fees Total bill @118 therms

 

 

 

 

 

 

Jan 2020

$11.57

$27.07

$31.84

$7.69

$78.17

Jan 2021

$12.00

$27.55

$36.56

$8.31

$84.42

 

Jan 2022

$12.00

$27.55

$75.48

$12.54

$127.57

 

Jan 2023

$12.40

$32.01

$133.27

$19.35

$197.03

 

 

Even with the increase in prices, natural gas remains cost-effective compared with most other energy sources. However, we recognize that higher gas prices are a challenge for many customers. We are committed to working with you, and we have assistance programs available. 

We also have a budget billing program, where your natural gas usage is averaged over 12 months so you pay the same amount each month all year long. This means your bills may be slightly higher than usual during the summer, when customers typically don't use as much gas, but it reduces the gas-cost portion of your bill during the winter heating season. For more information, click here.

In addition, here are a few suggestions about how to conserve your use of natural gas, especially during the colder months.

  • Turn your thermostat down.
  • Use our free Home Energy Analyzer for recommendations that could help you save hundreds of dollars through energy efficiency measures: nmgc.energysavvy.com
  • Weatherize your home to save energy and money, and to improve your comfort.
  • Clean or replace filters on your furnace.
  • Clean warm-air registers, vents, baseboard heaters and radiators. Make sure they’re not blocked by furniture, carpeting or drapes.
  • Open drapes and shades on your south-facing windows during the day to allow warm sunlight to enter. Close them at night to reduce the chill from cold windows.

To learn more about these programs or to arrange a payment plan, call us at 1-888-664-2726.