KCC alerts utility customers that high energy costs are forecast to continue nationwide due to increased commodity price volatility
TOPEKA – The Kansas Corporation Commission (KCC) is alerting consumers that energy prices are expected to remain high for the foreseeable future based on current national forecasts. This will likely increase the cost to cool homes and businesses this summer and heat them this winter. Now is the time to take steps to weatherize your home and undertake energy efficiency investments as you are able.
Like many other energy and commodity prices, monthly wholesale natural gas prices have recently increased to levels not seen in the United States since September 2008. Wholesale electricity prices have increased as well. On April 18, the New York Mercantile Exchange (NYMEX) futures price for natural gas climbed to nearly $8/MMBtu (Metric Million British thermal units) for May and June, with prices over $8/MMBtu for the rest of this year and upcoming winter. For context, natural gas prices regularly traded in the $2-$3/MMBtu range for much of the last decade.
Wholesale prices for natural gas are based on supply and demand and are not regulated, a decision made by the U.S. Congress in the 1980s. Accordingly, these costs are often outside the direct control of energy providers, and are passed through to the end consumer outside of a rate case without markup or profit. It is important to note that the pass through energy costs are audited by KCC audit staff to make sure customers only pay the actual wholesale energy costs that their utility provider pays, again without markup or profit.
The Energy Information Administration (EIA) recently released its Short-Term Energy Outlook indicating energy price forecasts for the rest of the year are subject to heightened levels of uncertainty from factors such as the continuing war between Russia and Ukraine, decisions of OPEC+, and the rate at which U.S. Oil and Natural Gas producers increase drilling in response to higher prices.
The Commission has launched an online resource to provide additional information, help consumers minimize the impact, and find financial and weatherization assistance. The information is available at https://kcc.ks.gov/