DU Hedging Keeps Gas Rates Stable
Natural gas prices have spiked recently due to the “freeze-off” of wells in the south central U.S. which has reduced overall supply. While this lack of supply has resulted in significant increases for retail customers in Texas and other area of the country, Decatur Utilities natural gas customers will see minimal changes in their bills due to DU’s “hedging” of its natural gas supply.
“For many years, DU has had a program in place where it purchases large blocks of natural gas, especially for usage during winter months,” said Gary Borden, Operations Manager. “By making these purchases when prices are lower, we are able to minimize situations like this during peak times and keep rates lower for our customers.”
As a result, Borden said DU customers should only see an increase of a few dollars in their total natural gas bills. Had DU not made those future natural gas purchases at lower wholesale prices, the increase in customer bills could have been much more.
(Note: Each DU customer’s natural gas bill is made up of two components: A fixed customer access charge and a “volumetric rate” based on how much natural gas is used. The volumetric rate fluctuates each month based on the cost of gas purchased and transportation fees.)
With the abundance of natural gas over the past few years, natural gas prices have been at historic lows. “DU’s program has purchased and locked in a large quantity of natural gas for its residential and commercial customer through the winters of 2025-2026 to stabilize rates and keep them low,” Borden said. He and Debra Curtis, DU’s Energy Analyst, are constantly analyzing the natural gas market and looking beyond for the best pricing even further into the future.
“This is one of the ways a public-owned utility works for the customer each day. We are not trying to produce a dividend for stockholders, but working for the customer” Borden said. “This hedging program is just one of the ways we strive to make sure our rates are kept as low as possible for everyone.”