South Dakota’s Public Utilities Commission is advising natural gas customers to prepare for rising prices in the coming months.
Experts have identified high global demand, growth in the consumption of natural gas that outpaces production, and record exports of liquified natural gas as reasons for rising prices expected this winter, the commission said in a news release.
Part of the increase in demand can be attributed to an increased reliance on natural gas for electricity generation, the release said. Traditionally, natural gas was most in demand for heating purposes during colder months. While nearly half of all U.S. homes still rely on natural gas as their primary heating fuel source, it has also become the largest source of electricity generation in the U.S., accounting for nearly 40% of utility-scale generation. This change makes the commodity highly in demand year-round and decreases the capacity available to be stored in preparation for winter.
Global events can also have an impact. Europe is in the midst of a natural gas crisis due, in part, to the ongoing conflict between Ukraine and Russia, the release said. Europe is dependent on Russian gas, a commodity that’s been largely unavailable or expensive since Russia’s invasion. As a result, the U.S. has increased exports of liquified natural gas to Europe, which contributes to higher prices at home, according to the commission.
The commission recommends installing a programmable thermostat, asking utility companies about budget billing, and conducting a home energy audit as ways to get a handle on natural gas bills. Other ways to reduce consumption include setting thermostats to lower temperatures, maintaining and upgrading appliances for greater efficiency, changing furnace filters, adjusting the temperature lower on water heaters, and conserving hot water.
The commission also has a webpage with more information about natural gas pricing.
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