Natural gas prices to stay high for a while, New Mexico Gas Co. says
Oct. 24—New Mexico Gas Co. reported Wednesday natural gas rates have rocketed and may remain high through the winter.
High demand for natural gas nationally and globally has created the problem, executives of the company told the Public Regulation Commission this week. Natural gas typically is used for heating homes and for gas cooking ranges and water heaters.
New Mexico Gas Co. executives said they have a system in which customers are protected from huge price spikes in November, December and January by hedging those high-use months through price ceilings agreed to by banks or large producers. That price protection is included in a premium paid by the company and passed on to customers. The protection covers the base rate of natural gas, or generally about 70 percent in a typical winter.
Customers still pay for a smaller volume, however, when additional natural gas is needed above the base amount. That smaller volume, called "swing gas," is not affected by the price ceiling.
Tom Domme, a vice president and general counsel for the company, said his team will send letters to customers that explain why the prices are high and describe assistance programs.
Commissioner Theresa Becenti-Aguilar of northwestern New Mexico suggested to Domme the company briefly station staffers at grocery stores to distribute the information. Domme said he liked the idea and would consider various methods of outreach.
New Mexico Gas said it buys natural gas from producers and passes the cost of the gas to its customers without markup.
The company expects the average price of natural gas in January to be more than twice as high as it was in January 2021.
