Unlike gasoline or milk prices, utility rates are mysterious to most consumers, with few able to say how much they pay per kilowatt-hour or per thousand cubic feet of gas. Consumers get just 12 utility bills in a year, unlike the daily gasoline pricing information they see, and utility bills are hard to read no matter what is done to simplify them. As a result many consumers insist that they have seen no benefit in their gas bill from the huge shale gas production that has flooded energy markets since 2008.
Despite the perception of no bill impact, gas costs and gas bills in fact have declined sharply since 2008. Take the incredible EQT (a gas utility in the Pittsburgh area that also drills and transports gas) gas rate and bill story as just one example.
EQT's 2011 gas costs charged to consumers are down 60% compared to October 2008. The lower gas rate produces residential bills that are $55 per month less in October 2011 than at the same time in 2008.
The current annual savings for a residential customer are about $660. A very big deal for median income families and the difference between having gas service or losing it for tens of thousands near the poverty line.
Here are the EQT details:
On October 1, 2008, the gas cost rate charged by EQT and approved by the Pennsylvania Public Utility Commission was $10.98, and the average residential bill was $146.35.
On October 1, 2011, the EQT gas cost is $4.78, and the average residential bill is $91.12, a huge savings compared to 2008 when shale gas production in the Marcellus began to ramp up. Indeed the 2011 gas rate is 10% lower than it was just last year, when EQT charged $5.31 per thousand cubic feet and the average bill was $99.29.
Savings of this magnitude are a major boost to the economy, as these lower gas bills free up income to purchase other goods and services. These lower gas bills also come when major cuts to the Low-Income Home Energy Assistance Program are hitting needy families.
While reading gas bills will be as difficult as ever this winter, the bottom line is much lower than it was in October 2008. Shale gas has yielded the much lower gas bills delivered last winter and the still lower gas bills that will arrive this winter.