Archived Story

Explaining city gas prices

Published 6:49pm Friday, February 21, 2014

Dear Editor,

Over the past few years the citizens of Alexander City have experienced relatively stable natural gas prices. We have also experienced mild to normal winter temperatures.  This year, due to colder than normal temperature across the eastern United States, demand has caused natural gas prices to increase steadily over the past few months.
We understand that the increase cost per unit and the severe cold temperatures has resulted in extremely high utility bills for our customers. The Alexander City Gas Department would like to let our customers know what we have done to lessen the impact to our customers.
In October 2013 the Gas Department locked in approximately twenty five percent (25%) of our December, January, and February supply at $3.92/mcf, the remainder of out gas is purchased at the first of the month index cost. The cost savings passed along to our customers for February is expected to be over $16,000.00 with the total supply for the month costing nearly $200,000.00.
Since March volumes can fluctuate from extremely high temperatures to extremely low temperatures, we did not lock in the price of any March gas on the Futures Commodities Exchange. The Alexander City Gas Department has some gas stored in caverns in other states.  This gas is used as a backup supply when gas is not available from traditional sources. Also, it is sometimes used as a supplemental supply near the end of winter to lower the weighted cost of gas. Our plan is to pull gas from this source in March. This will result in estimated savings to our customers of $34,000.00 for the month of March.
The Alexander City Gas Department is a part of the Alexander City Utility system and is a not for profit organization.  Our rates are consistently in the bottom fifty percent of a survey group representing gas systems from across our state. All Utilities need operating reserves to allow for maintenance of our system, purchase of capital equipment and capital improvements, and expansion of our facilities to serve industry, business, and other customers when appropriate.
The Alexander City Gas Department, along with the Mayor and the City’s administration, would like to thank our customers for their continued support and understanding. If you have any questions concerning our rates please feel free to contact the Alexander City Gas Department at (256) 409-2070.  You can also find useful information on The City’s website at http://www.alexandercityonline.com. There are links to information about how to request natural gas service, what to expect, and what to do if you smell gas. There are also links telling about our Underground Damage Prevention program along with other safety information and ways to conserve energy that will help with the cost of your utility bill year round.

Sincerely,
Mike Stewart
The City of Alexander City Gas Department

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