Working Gas in underground storage directly affects the daily electric market price rates in Texas. The reason for this is because the Texas Market Clearing Price for Energy has a 90% correlation with the natural gas market rate. Due to supply and demand factors the natural gas storage report has a daily affect on electric rates in Texas. View the graph: Working natural gas in storage comparison with 5 year Range.

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Natural Gas Distribution :

Texas natural gas distribution systems include 31 investor owned utilities and 85 municipally owned systems. These natural gas distribution systems serve 3.9 million customers, which comprise domestic households, small commercial, and large industrial customers.

At the NYMEX, the price of the futures contract for February delivery at the Henry Hub settled at $7.421 per MMBtu yesterday (Wednesday, January 24), increasing $1.187 or about 19 percent since the previous Wednesday. As was the case in the spot markets, futures prices increased in four out of five trading sessions this week. However, while declines characterized the first day of trading in the spot markets this week, the one session with price declines at the NYMEX occurred yesterday along with newly-released forecasts for warmer weather returning to the Lower 48 States in mid to late February. But mid-February is still a few weeks away and the slight retreat in price yesterday─about 18 cents per MMBtu─may have been simply a mild break from the vigorous buying in recent trading sessions. The average increase for the near-month contract during the four trading sessions prior to yesterday was $0.34 per MMBtu. The price for the March 2006 futures contract experienced similar increases this week, ending trading yesterday at $7.379 per MMBtu, or 18.3 percent higher on the week. The 12-month futures strip (February 2007 through January 2008) increased $0.735 per MMBtu (or 10.4 percent) to $7.768. The futures contracts for much of the season to date have traded at premiums relative to the Henry Hub spot price. This has provided suppliers economic incentives to buy gas on the spot market rather than pull from storage. However, spot prices in recent days have surpassed futures prices slightly:  the average Henry Hub price yesterday was about 4 cents higher than the closing price of the February futures contract. This relative pricing favors pulling gas from storage rather than paying for gas on the spot market.  Despite higher prices since last Wednesday, January 17, futures contracts are trading at significant discounts relative to last year’s hurricane-induced elevated price levels. At yesterday’s closing price, the February 2007 contract was priced at a $1.26 per MMBtu discount to the settlement of the February 2006 contract at $8.682 on January 24, 2006, despite following an extremely warm period during January of that year.

Texas Natural Gas Rates :

Natural Gas Spot Price :

Natural Gas Prices February 2007

Lower natural gas spot prices at many trading locations in Texas. For the weeks of December, the price for next-day delivery at the Henry Hub decreased 78 cents per MMBtu, or 10.8 percent to $6.43 per MMBtu. The NYMEX futures contract for January delivery at the Henry Hub settled at $6.769 per MMBtu, which was 90 cents less than the previous weeks. Natural gas in storage decreased to 3,167 Bcf in December, leaving inventories at 9.5 percent above the 5-year average. The spot price for West Texas Intermediate (WTI) crude oil moved up $1.74 per barrel or about 2.8 percent since last Week to $63.08 per barrel or $10.88 per MMBtu.

Strong space-heating demand increased the price of spot gas across the country, as winter has finally set in after the unusually warm weather thus far this season. The Henry Hub price rose in four straight trading sessions for a net gain of $0.89 per MMBtu, or 13.5 percent, for the report week. Although it is still unclear how long the winter-like temperatures will remain (some forecasters see above-normal temperatures returning in mid-February), the recent advent of freezing temperatures has stirred the spot markets. As often occurs at this time of year, buyers and traders this week moved to cover positions in localized markets experiencing extreme weather, leading to erratic pricing patterns across the country. For example, gas buyers resorting to the spot market for incremental supply in the New York area faced sharp price increases in the past several days. The price at Transcontinental Gas Pipe Line Zone 6 in New York increased more than $12 per MMBtu on the week to $20.07. Meanwhile, in New England, the spot price for delivery off the Algonquin Gas Transmission pipeline system rose by $6.35 per MMBtu on the week to $13.97 yesterday. Although there are numerous reasons for the price spikes in the Northeast, a primary consideration likely is congestion along pipelines into and within the region. In recent days customers with

City Gates:

Gate stations serve three purposes. First, they reduce the pressure in the line from transmission levels (200 to 1,500 pounds) to distribution levels, which range from ¼ pound to 200 pounds. Then an odorant, the distinctive sour scent associated with natural gas, is added, so that consumers can smell even small quantities of gas. Finally, the gate station measures the flow rate of the gas to determine the amount being received by the utility.