NBU NEWS RELEASE
FOR IMMEDIATE RELEASE: November 10, 2005
Contact: Gretchen Reuwer, NBU Communications
Manager, (830)
629-8486
Natural gas prices impact cost of electricity for NBU customers
NEW BRAUNFELS—The hurricanes tearing through the Gulf
of Mexico and wreaking havoc on coastal cities and industries continue to
impact the nation. Prices of natural gas have skyrocketed in recent months
and the cost of everything from home heating to the production of electricity
will be affected. NBU and its customers received preliminary announcements
earlier this month from the LCRA, the not-for-profit organization that supplies
wholesale electricity to NBU and 43 other public utilities in Central Texas,
indicating that they were facing an electric rate increase that was going
to be significant.
The cost of natural gas used to produce electricity has nearly doubled since
the beginning of 2005. The damage that Hurricanes Katrina and Rita caused
to natural gas production facilities, processing plants and transportation
capabilities, combined with extended hot summer weather, has affected prices
for electric utilities dependent upon gas.
Natural gas is used as fuel in four of LCRA’s seven fossil fuel power plants.
Wind, hydro and coal, as well as long- and short-term purchases from other
suppliers, round out the energy mix LCRA provides its wholesale electric
customers. Despite the fact that the energy mix utilized by LCRA has kept
the situation with the natural gas market from impacting its customers as
much as if they were 100% dependent on gas, the escalating cost of this fuel
made an electric price increase by the organization unavoidable.
The cost of fuel is passed through with no increase from LCRA to NBU and
finally to NBU residential and commercial customers. The money from the fuel
charge pays for fuel used to make electricity and for electricity that the
LCRA sometimes buys on the open market to help meet demand.
As a result of fuel charge increases passed on by LCRA, NBU residential
customers’ electric bills will go up as much as $20 for every 1,000 kilowatt-hours
(kWh) used beginning in November. The typical NBU residential customer has
an average usage of about 1,350 kWh. This will translate into a nearly $30
increase per month with the increased fuel charge.
Even though the fuel increase effectively raises the per kilowatt cost for
NBU residential customers from 6.48 cents to 8.55 cents, NBU’s rate compares
favorably to those in the surrounding area and across the state. Utility
customers in other areas of the state are facing rates as high as 13 to 14
cents per kilowatt hour and pending fuel charge increases are expected to
push those their total per kilowatt cost even higher.
NBU is working with customers to help mitigate the effect that the added
fuel charge will have on monthly budgets. Energy audits are offered to both
NBU residential and business customers free of charge. An audit can help
pinpoint areas where customers can become
more efficient in their electric usage and ultimately lower their costs.
These can be scheduled by calling (830) 629-8440.
