CFU Works to Keep Natural Gas Costs as Low as Possible
CFU works on customers' behalf to purchase natural gas at the best rate and keep utility bills as low as possible.
CFU cautions customers that higher natural gas market prices are expected this year.
Like many utilities, CFU has a Purchased Gas Adjustment (PGA) on utility bills that reflects the market price of gas and its delivery to Cedar Falls. That charge shifts up and down based on the wholesale price CFU pays for the gas it provides to customers. This cost is a pass-through; CFU does not mark up what we pay for natural gas.
The market price of natural gas fluctuates throughout the winter when temperatures vary and consumers use more. When extreme cold impacts a large swath of the country, demand for natural gas quickly rises as does the market price.
How CFU Help Minimize Impact
To help minimize the fluctuations and large swings in the gas market, CFU uses a combination of long-term contracts, hedges and preset monthly natural gas prices. A predetermined monthly natural gas price is used to purchase CFU’s predictable natural gas supply based on normal temperature conditions for the month. CFU must purchase the same quantity of gas for each day of the month at the preset natural gas price. Usage above the preset quantity is then purchased on the daily market.
Using these methods, we lock in a low monthly price for a significant portion of the gas we buy to supply to the community.
On really cold days, customers use twice as much natural gas as they do on an average winter day. Many furnaces must run 100% of the time when it’s bitter cold to keep homes at a comfortable temperature.
The extra gas needed to heat customer homes and businesses is purchased from the daily market.
The daily price is more variable in nature and goes up and down based on the supply and demand for natural gas across the U.S. Purchasing extra gas every month to cover extreme temperature swings is cost prohibitive and would be even more expensive than the daily gas market costs, even during extreme temperature swings.
Utility bill impacts will vary by customer usage, winter temperatures and market conditions. Small behavioral changes throughout the year and energy efficient home upgrades can help you save money on your natural gas bill.