Natural gas price dips below $2

Iowans could see lower heating bills next month as the spot price of natural gas dipped last week to below $2 per million metric thermal units.

At $1.98 per million metric thermal units, that's 45 percent lower than last year at this time, according to the U.S. Energy Information Administration and 55.6 percent below the price five years ago.

MidAmerican Energy, which supplies natural gas to 726,000 customers in Iowa, Illinois, South Dakota and Nebraska, contracts in advance at a set price for roughly 50 percent of its winter heating season natural gas supply.

'We do that to give us some price stability and protect customers from extreme price spikes,” said Ruth Comer, MidAmerican Energy spokeswoman. 'We purchase the remaining 50 percent of our supply on the spot market, which enables us to take advantage of lower prices.”

Comer said customers can check how much they paid for natural gas by looking at the 'gas supply charge” box on their bill. The utility passes the charge that it paid for natural gas through to customers.

Comer said the winter heating season, which began Nov. 1, has been very mild in terms of weather, which is a major factor in heating bills.

'So far this year, our heating season has been 20 percent warmer than normal and 33 percent warmer than the same period last year,” Comer said. 'As of Monday, we were seeing natural gas futures prices about 37 percent below the final futures price for last year's heating season, 42 percent below the five-year average and 61 percent below the 10-year average.”

Harold Hommes, fuel analyst with the Iowa Department of Agriculture and Land Stewardship, said the lower spot natural gas price is a reflection of ample supply.

'There's plenty of natural gas available,” Hommes said. 'The market and U.S. natural gas production have changed drastically in recent years.”

The U.S. Energy Information Administration on Thursday reported that natural gas stocks decreased by 76 billion cubic feet for the week that ended on Dec 4. Analysts were expecting a storage withdrawal of around 60 billion cubic feet.