Another Benefit from Marcellus

Natural gas users are in for a treat this winter as rates drop to their lowest level in more than a decade. Thanks go largely to development of the Marcellus Shale.

UGI Penn Natural Gas (UGI), the dominant natural gas utility in the region, announced the average natural gas bill will be 9 percent lower than last year. The average residential heating customer's bill will fall from $108.58 to $98.83 per month, according to rates filed with the state Public Utility Commission.

The reason consumer cost is less because UGI's cost is, too. The purchased gas cost rate - the price it pays for gas and directly passes through to customers - has fallen dramatically.

From Sept. 1 through Dec. 1, the cost for 1,000 cubic feet of natural gas, or Mcf, fell from $6.76 to $5.66, a 16 percent drop and the lowest since the fall of 2000.

The extraction of natural gas from shale formations throughout the U.S. and in Pennsylvania has made it an abundant, readily available resource. The state's Marcellus Shale production, still considered by many to be in its infancy, can in 13 days meet UGI utility customers' needs for an entire year, said UGI spokesman Joe Swope.

The other bonus of the development of shale gas is stability. When the Northeast was dependent upon natural gas from the Gulf of Mexico, for example, hurricanes Rita and Katrina and the disruption cause in the natural gas industry drove UGI's gas rate to $11.18 per Mcf, more than twice the current rate.

What will you do with your $10 extra dollars a month?