Increasing Cost of Gas. What's Happening and How Can We Help You?
To our customers,
Over the last few months, you have probably noticed that the cost of gas portion of your natural gas bill has increased. We are concerned about the impact that this will have upon you and later in this memo we will describe the options available to you to help you deal with these increased costs. Before we go there, we wanted to discuss briefly why the cost of gas on your bill has gone up recently.
First, gas prices worldwide have been rising because of a shortage of natural gas and an increased demand for natural gas around the world. When demand exceeds supply, prices go up. These worldwide price increases are affecting the United States and New Mexico, and because the Permian Basin -- one of the basins that supplies New Mexico Gas Company with its gas -- is more interconnected than ever with world markets, companies such as NMGC, which competes for natural gas, must pay higher prices.
In this context, please understand that NMGC does not produce natural gas, but instead buys natural gas from producers. We then pass the gas we purchase on to you, our customers, without markup. While we do everything we can to purchase gas at the lowest price, the price is mostly out of our control, and when prices go up we must pass these costs on to you, our customers. Similarly, when prices charged to us for gas go down, we pass these lower prices on to you. To be clear, there is no profit or margin for NMGC on the gas we purchase and sell to you. You pay what we pay, no more and no less.
Second, as you may recall, during the extremely cold weather that struck the Southwest region in February 2021, the price of natural gas charged to NMGC, and other gas utilities, by producers went up dramatically. As described above, these gas costs get passed on to our customers without markup, and NMGC was authorized to begin recovering these gas costs in bills beginning in July 2021 and continuing through December 2023. This recovery has been reflected in your bill since July 2021.
In short, market conditions, both nationwide and worldwide, have forced the cost of natural gas significantly higher this year when compared with last year. This is expected to continue through the spring of next year.
Given this situation, we are recommending you do all you can to conserve using natural gas. There are several things you can do to minimize your energy costs.
- Turn your thermostat down.
- Use our free Home Energy Analyzer for recommendations that could help you save hundreds of dollars through energy efficiency measures.
- Weatherize your home to save energy and money and to improve the comfort of your home. Home weatherization includes sealing air leaks and adding insulation.
- Clean or replace filters on your furnaces more often -- even once a month -- or as recommended by the manufacturer.
- Clean warm-air registers, vents, baseboard heaters and radiators as needed. 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 sunlight to enter. Close them at night to reduce the chill from cold windows.
Even with best efforts to minimize impacts, we recognize these cost increases could have a significant impact on you, and we are committed to working with you to provide information on payment assistance and/or assistance in establishing a payment plan.
Here are the assistance programs that are available:
- LIHEAP is a residential assistance program through the New Mexico Human Services Department that offers winter heating assistance for income-qualified customers. To learn more and apply, click here.
- NMGC's HEAT New Mexico fund is administered by the Salvation Army. It is available to help income-qualified residential customers pay their winter heating bills. Click here.
- Rent Help New Mexico offers rental and utility assistance through the State of New Mexico. Click here.
- The New Mexico Mortgage Finance Authority administers EnergySmart, an energy efficiency program for income-qualified customers to help improve the energy efficiency of their homes and lower utility bills.
- NMGC's Small Business Covid Relief Fund provides financial assistance to small business owners who were affected by the pandemic. Those who qualify will be eligible for a one-time credit of up to $250 and can apply online.
To learn more about payment plans or if you have questions, click here for more information or reach out to our Call Center at 1-888-664-2726.
Thank you and call us if we can assist you further.