RI Natural Gas Customers Could See 10 Percent Price Drop this Winter

The global glut of oil and gas has been good news for drivers enjoying low prices at the pump. It could also mean cheaper heating bills this winter for National Grid natural gas customers in Rhode Island.

The energy giant said in a Wednesday announcement that the Rhode Island Public Utilities Commission could approve a proposed rate cut of 9.6 percent beginning Nov. 1.

Coupled with the reduction that went into effect on Nov. 1 of last year, customers could be paying about 14 percent less than what they paid through “most of 2014,” the company said.

“We know the winter season can pose an extra challenge when it comes to energy costs so we’re very happy to be able to pass on the savings created with the availability of lower cost natural gas,” said Timothy F. Horan, president of National Grid in Rhode Island. “Domestic natural gas is essential to providing the mix of energy sources that is essential to our region’s future growth and prosperity.”

There are two primary reasons for the lower prices, according to National Grid. The first is an anticipated drop in the cost of natural gas in general. The second is a “reduction in the surcharge used to reconcile the difference between the cost of gas we purchased in the prior year versus what customers were billed.”

Lower prices doesn’t mean that supply constraints don’t remain for National Grid.

The Northeast region is served by a single pipline that is running at near capacity. During extreme cold events, supply prices can swing wildly since most of the region’s power plants are powered by natural gas.

Those price spikes translate to higher electricity costs.

National Grid has been lobbying for the expansion of pipeline capacity as well as advocate for more renewable energy sources and increasing energy efficiency among power grid users.