Energy prices of virtually all fossil fuels have been rising significantly over the past several years and natural gas is no exception, even with somewhat lower natural gas prices this year than last.
PECO must pay more for the gas it buys on the wholesale market for its customers due to a variety of wholesale market conditions. Just like freezing weather in Florida affects the price of orange juice, colder weather also affects the price of natural gas. Plus, more homes and businesses are using natural gas than ever before. Increased demand pushes prices higher and reduces available supply. But, although more natural gas is being consumed, PECO customers can be assured natural gas supply is available to meet their heating needs this winter.
PECO’s natural gas bills are made up of two parts – the delivery charge (made up of the distribution and customer charges) and the commodity charge. The delivery charge, which has not been increased since 1988, reflects the cost of moving the natural gas from the international pipeline to your meter. Controlled by PECO, this is the portion of the bill that reflects the company’s business costs and profit.
The commodity charge, which makes up roughly 75 percent of a typical monthly natural gas bill, reflects what we pay for natural gas on the wholesale market. This cost is passed through to you without any mark-up from PECO.
You can view the following graphics to enhance your understanding of natural gas rates: