Magnolia Residents

[Derrik]

Understand demand but there is nothing to stop them from buying at any price and passing it on to us. After 12 years of under $200/month bills (including 2010) - last 2 months were $297/$604 and we have never had our thermostat above 68 and it is set at 62 when we are at work - 5 days a week.

[dbaio1]

Information from our Nextdoor Page:

CONCERNED CUSTOMERS MEETING WITH HUGHES NATURAL GAS 11:00 AM CST FEBRUARY 12, 2018
A number of Hughes customers met with Angie at the Hughes Pinehurst office today to understand the significant rise in recent natural gas bills. Below is my understanding of factors per Hughes representative Angie:
• Unlike larger gas providers such as Center Point Energy who can take advantage of long term pricing contracts, Hughes only has 5400 customers spread across six counties and because of their small size, buys natural gas on the “spot” market most often at a higher cost.
• Gas cost expressed in MMBTUs on the spot market for the February billed month rose by 33% from $7 to $10.50. You can monitor these costs locally by referencing the Houston Ship Channel Based Index. You see gas cost expressed in CCF on your bill which is derived from a factored MMBTU purchase cost. (There is always the chance that our cost CCF will go back down some next month… it changes on our bills each month which is determined by the Gas costs on the market)
• Hughes Volumetric Service Fee (their cost of operations) actually went down for the February billing month from $0.705 to $0.557.
• Ad Valorem (Latin “according to the value)” is an annual tax that we see on our bill once a year. You should not see it next month. It is assessed by the taxing authorities based on the value of all service lines and property components used in the delivery of natural gas. The total cost of the components is divide across the customer base. Customers in low density acreage neighborhoods such as High Meadow Ranch pay a higher portion of the ad valorem per customer since service lines etc. are divided among a smaller customer base.
• Hughes’ current rate tariffs were established in 2012. Hughes recovers the legal and other costs for this application via the Rate Case Surcharge. This cost is spread across five years and should go away after next month’s bill.
• IRA—Incremental Rate Adjustments are made each year after the initial tariff rates are established. The last IRA will be added for the years 2017 and no new IRA added until after the next rate tariffs are approved by the Texas Railroad Commission. It is estimated that the new tariffs will go into effect in 2020.
• Unlike fourteen other states, natural gas in Texas has NOT been deregulated. Hughes paid for the gas lines in our neighborhood and holds monopolistic rights in perpetuity. Unlike water/sewer Municipal Utility Districts, the cost of the lines and equipment is not amortized and eventually paid off. We will remain wedded to Hughes as our natural gas supplier so long as we both so live or until our legislature decides to join other states in deregulating natural gas.
Other Factors of note:
• The United States is currently the world's largest natural gas producer, having surpassed Russia in 2009. Natural gas production in the United States increased from 55 billion cubic feet per day (Bcf/d) in 2008 to 72.5 Bcf/d in 2016. Most of this natural gas—about 96% in 2016—was consumed domestically. Abundant natural gas resources and large production increases have created opportunities for U.S. natural gas exports. In 2017 the United States became a net natural gas exporter.
• The price of natural gas as listed on the NASDAQ has decreased 22% in the past year

• This is an election year. We should all understand our politician’s thoughts regarding natural gas deregulation and the elimination of monopolistic pricing by natural gas providers.

All makes perfect sense to me. However those Spot prices of $7 - $10.50 are flat out highway robbery. I would ask the TRC to investigate.

[WItoTX]

Understand demand but there is nothing to stop them from buying at any price and passing it on to us. After 12 years of under $200/month bills (including 2010) - last 2 months were $297/$604 and we have never had our thermostat above 68 and it is set at 62 when we are at work - 5 days a week.

If they deregulate, it would be beneficial to everyone involved. And it would make sense to buy low and in bulk vs just whatever the market rate is.

I can't speak to your house, but knowing what I know about my house here in Texas, the outer walls are only 2x4, so your price jump doesn't seem unreasonable, especially if rates go up (Assuming you have the same thickness walls as me). You can't get a lot of R-value out of a 2x4 wall, especially one designed for high temps, not low temps.

Good luck though, I hope if they gouged you, you get something back!

[ren087]

I live in Pinehurst and my bill was only $2 more. I don't turn on the heat and only use gas for Dryer and Water Heater so maybe I got off easy.