Natural gas prices

There are two main components in natural gas bills:

Distribution – A charge for delivering natural gas to a home or business. The charge:

• Covers distribution system costs such as local pipes, meters and customer service expenses.
• Does not change monthly but is adjusted periodically after review by state regulators.

Supply or commodity - The cost of natural gas that MGE buys for its customers is passed through to customers as a separate charge on the bill. It changes monthly depending on the:

• Current market price of natural gas.
• Price of gas in storage.
• Financial hedging that mitigates volatile price changes.

Traded as a commodity
On the New York Mercantile Exchange (NYMEX), natural gas prices are often volatile and follow price trends for domestic and global oil markets. The market’s volatility is due to:

• Tighter supplies.
• Global tensions.
• High cost of competing fuels such as oil and propane.
• Decreasing natural gas supplies from Canada.
• Weather, such as extreme cold weather or hurricanes that may damage gas facilities. 
• Increasing international demand for natural gas.

At MGE, we:

• Aggressively pursue the best natural gas market prices available for customers.
• Begin to buy gas supplies in the summer and put this gas into storage to:
• Ensure adequate supplies for winter.
• Act as a hedge against possible higher winter prices.
• Employ a financial risk management program to reduce price swings for customers caused by volatile gas prices.

Control your costs
MGE offers energy-saving tips and billing plans to help you manage your energy costs.

Residential customers

• Energy-saving tips.
• The Budget Payment Plan spreads your energy costs more evenly over a 12-month period to reduce the impact of higher winter or summer bills.
• Call us at 252-7222 if you are having difficulty managing your energy bills.
• View your energy use.
• Learn more at the Residential Natural Gas Prices FAQ.

Commercial customers

• Energy-saving tips.
• Call us at 252-7007 if you are having difficulty managing your energy bills.
• View your energy use.
• Learn more at Commercial Natural Gas Prices FAQ

For more information
American Gas Association
Commercial and Industrial - Understanding Natural Gas Price Volatility [PDF - 168 KB]
Residential - Understanding Natural Gas Price Volatility [PDF - 168 KB]
The Energy Information Administration (U.S. Department of Energy)
The Natural Gas Supply Association