As natural gas prices reached a seven-year high last week, the city of Fremont is feeling the effects.
Last week, prices reached as high as $5.01 per 1,000 cubic feet (Mcf), according to a city update. The City of Fremont bills its gas rates per hundred cubic feet (Ccf).
“There’s bigger houses, smaller houses, more efficient ones, less efficient, all those things, but the average household uses about 120 Ccf of gas a month,” Executive Assistant Lottie Mitchell said.
Prices for the first part of September went up 40 cents, which is due to a 214 Bcf (1,000,000,000 cubic feet) of gas deficit to the five-year average, according to the update.
Additionally, short-term production drop-offs have been seen in the Gulf of Mexico due to Hurricane Ida, which struck late last month.
Mitchell said gas prices in Fremont are up $2 per Mcf this year compared to last year. Going off of data from January, February and March of this year, she said the city expects to see an increase of around $24 per residence for those same three months next year.
“And that’s if the 20 cents per Ccf increase stays,” she said. “It’s all dependent on the market, but right now, we could project about a $24 a month increase for residential accounts for their gas.”
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According to the update, some of Fremont’s purchased natural gas is placed into storage during the summer when prices are lower. This is to offset the larger price spikes during the wintertime.
Despite this combatting the higher prices, customers will feel their effects when the storage is depleted and must be refilled with the higher-priced gas, the update said.
Along with the United States, Europe is also experiencing a natural gas shortage with a record-low amount. The rise in cost is expected to go into 2022.