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Insights > The higher cost of natural gas and its impact on your utility bill
The higher cost of natural gas and its impact on your utility bill
08/16/2022
This summer, a trip to the grocery store or a stop at the gas station has probably left your wallet feeling a lot lighter than in years past. In fact, since December 2019, the cost of gasoline at the pump has increased more than 65%. Over that same time, the cost of natural gas, which Entergy purchases to fuel a portion of its power generators to deliver electricity to customers, has more than tripled.
While the price of many goods and services have been on the rise, natural gas has been uniquely impacted by global unrest, extreme temperatures, supply chain constraints and severe weather events. June’s natural gas costs more than doubled when compared to June of 2021.
Entergy Louisiana and Entergy New Orleans work diligently to balance the delivery of clean, affordable and reliable power. In fact, the companies’ generating fleet has helped provide power through one of the hottest summers on record.
How exactly does the cost of natural gas impact my bill?
Customers can see the impact of natural gas prices on their bills by looking at the fuel adjustment line item, which is made up of the fuel adjustment rate – which fluctuates – and the total amount of kilowatt hours used in that billing cycle. Entergy does not profit from this charge. Rather, customers will see an increase to the fuel adjustment when operating costs go up, and a decrease to the charge as operating costs go down.
Entergy Louisiana and Entergy New Orleans customers are charged for natural gas on a two-month lag, which is sooner than utility customers in many other states. This means a customer’s bill in July will show a fuel adjustment charge that reflects the impact of natural gas prices during May. Over the coming months, other utilities across the nation are expected to see bill increases similar to what Louisiana customers are seeing now.
Residential gas bills, on the other hand, likely have not been affected in the same way as electricity bills, as customers tend to use less natural gas and more electricity in the summer months. This is due to the tendency of customers to run A/C units more often during the summer and heaters more often during the winter. If fuel prices are still elevated in the winter months, gas customers could see higher bill impacts as gas usage increases.
Bill assistance is available
During these hot summer months, our customers have recorded record electricity usage. Coupled with the impacts of natural gas, bills have been unusually high. Any customer struggling to pay their utility bill is encouraged to explore all of our bill help options and energy efficiency programs.
Visit here to learn more about bill impacts and what we are doing to help customers manage their bills.
