FOR IMMEDIATE RELEASE: October 25, 2022                
MEDIA CONTACT: Leah Mohr, South Dakota Public Utilities Commission, (605) 773-3201 or (605) 280-4327

PUC alerts customers to prepare for higher winter heating costs due
to US natural gas price surge

PIERRE, S.D. - South Dakota’s Public Utilities Commissioners advise natural gas customers to prepare for rising prices in the coming months. Customers concerned about increased heating expenses this winter should take steps now to ensure bills remain manageable.

Natural gas prices are primarily determined by the market. The PUC’s natural gas rate authority is limited to factors related to natural gas delivery, which account for roughly 30% of the overall cost. The other 70% is determined by numerous market factors like supply and demand, weather, production, storage levels and imports and exports.

Experts have identified high global demand, a growth in the consumption of natural gas that outpaces production and record level exports of liquified natural gas as some of the biggest contributors to the rise in natural gas prices expected this winter.

“Part of the increase in demand can be attributed to an increased reliance on natural gas for electricity generation. Traditionally, natural gas was most in demand for heating purposes during colder months and, while nearly half of all U.S. homes still rely on natural gas as their primary heating fuel source, it has also become the largest source of electricity generation in the U.S. accounting for nearly 40% of all utility-scale electricity generation. This change makes the commodity highly in-demand year-round and decreases the capacity available to be stowed away in preparation for winter,” explained PUC Chairman Chris Nelson.

“Current events can also have a big impact on commodity markets, even when those events are happening halfway around the world. The current status of the global natural gas market is a perfect example of that,” said PUC Vice Chairperson Kristie Fiegen. “Europe is in the midst of a natural gas crisis due, in part, to the ongoing conflict between Ukraine and Russia. Europe is heavily dependent on Russian gas, a commodity that’s been largely unavailable or extremely expensive since Russia’s invasion. As a result, the U.S. has increased exports of liquified natural gas to Europe which, in the end, contributes to higher prices at home,” Fiegen continued.

“We highly recommend South Dakota customers take the time to prepare for these higher expenses now. Simple steps like taking a fresh look at your budget, installing a programmable thermostat, or contacting your utility company to ask about a budget billing plan that helps spread out higher utility costs over several months rather than having you pay it all at once can make a big difference. Completing a home energy audit is another great way to identify any air leaks, simple fixes or upgrades that could save you money in the long run,” stated PUC Commissioner Gary Hanson.

Other ways to lower natural gas and electric consumption include setting your thermostat to a lower temperature, maintaining and upgrading appliances for greater energy efficiency, changing furnace filters, adjusting your water heater tank’s temperature and conserving hot water.

See a list of frequently asked questions about natural gas pricing on the PUC’s website at https://puc.sd.gov/Publications/naturalgaspricesfaq.aspx. For additional tips on conserving energy and information on energy efficiency programs, contact your local utility company.

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